Question 1

Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda wishes to ratify this contract, Wanda:

Accepted Answer

A)  must reach the age of majority and ratify the contract as a whole. 
B)  may do so by express notification at any time before reaching the age of majority. 
C)  may at any time keep the stereo but avoid any remaining debt owed on the stereo. 
D)  may do so at any time by express or implied action before or after reaching the age of majority. 
A)  must reach the age of majority and ratify the contract as a whole. 
B)  may do so by express notification at any time before reaching the age of majority. 
C)  may at any time keep the stereo but avoid any remaining debt owed on the stereo. 
D)  may do so at any time by express or implied action before or after reaching the age of majority.

Question 2

Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. This contract is:

Accepted Answer

A)  valid. 
B)  voidable. 
C)  void. 
D)  voidable only at the option of Anna. 
A)  valid. 
B)  voidable. 
C)  void. 
D)  voidable only at the option of Anna.

Question 3

At common law, a minor was a person who was under twenty-one years of age.

Accepted Answer

A) True 
 B)False

Question 4

All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.

Accepted Answer

A) True 
 B)False

Question 5

Sean had two beers and felt tipsy. He made a deal with Yoko to buy her stereo. He can avoid the contract because of lack of capacity.

Accepted Answer

A) True 
 B)False

Question 6

Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority.

Accepted Answer

A) True 
 B)False

Question 7

John is 17 years old and earns extra money by repairing cars. Nathan, who is 21, brings his car to John for repairs, and John ruins the brake system of the car, because of his inexperience. If Nathan sues John for negligence in performing the auto repair contract, in most states John will have no liability, because the tort of negligence and the auto repair contract are connected.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would be a valid ratification? Two weeks after his eighteenth birthday, Jerry:

Accepted Answer

A)  sells the motorcycle he contracted to buy when he was seventeen. 
B)  calls the bank to assure them that he will continue making payments on the loan agreement he signed a month before his eighteenth birthday. 
C)  makes a payment on the installment contract he signed a month before. 
D)  All of these. 
A)  sells the motorcycle he contracted to buy when he was seventeen. 
B)  calls the bank to assure them that he will continue making payments on the loan agreement he signed a month before his eighteenth birthday. 
C)  makes a payment on the installment contract he signed a month before. 
D)  All of these.

Question 9

All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.

Accepted Answer

A) True 
 B)False

Question 10

A mental illness or defect of one of the parties to a contract automatically makes a contract void.

Accepted Answer

A) True 
 B)False

Question 11

A person taking a prescription medication will be treated the same as an incompetent under the cognitive ability test.

Accepted Answer

A) True 
 B)False

Question 12

Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, Steve:

Accepted Answer

A)  would be out of luck. 
B)  must have the truck repaired. 
C)  will receive his money less the depreciation in value of the vehicle. 
D)  may simply return the vehicle and get his money. 
A)  would be out of luck. 
B)  must have the truck repaired. 
C)  will receive his money less the depreciation in value of the vehicle. 
D)  may simply return the vehicle and get his money.

Question 13

In some states, minors are liable for contracts involving bank accounts and student loans and cannot avoid these contracts even though they can avoid other types of contracts.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not true regarding the contracts of incompetent persons?

Accepted Answer

A)  An incompetent person is liable for necessaries. 
B)  Unlike a minor, an incompetent person can never ratify a contract. 
C)  To avoid a contract, a person need not be permanently incompetent. 
D)  A person is competent unless he is unable to understand the nature and effect of his act. 
A)  An incompetent person is liable for necessaries. 
B)  Unlike a minor, an incompetent person can never ratify a contract. 
C)  To avoid a contract, a person need not be permanently incompetent. 
D)  A person is competent unless he is unable to understand the nature and effect of his act.

Question 15

Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with
intoxicated persons because of intoxication's voluntary nature.

Accepted Answer

A) True 
 B)False

Question 16

Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. Fay is:

Accepted Answer

A)  still liable since she had to disaffirm before her 18th birthday. 
B)  still liable because selling the skis amounts to a ratification. 
C)  not liable because she disaffirmed the contract. 
D)  not liable because skis are not necessaries. 
A)  still liable since she had to disaffirm before her 18th birthday. 
B)  still liable because selling the skis amounts to a ratification. 
C)  not liable because she disaffirmed the contract. 
D)  not liable because skis are not necessaries.

Question 17

Ratification can occur in which of the following ways?

Accepted Answer

A)  Through express language 
B)  As implied from conduct 
C)  Through failure to make a timely disaffirmance 
D)  All of these. 
A)  Through express language 
B)  As implied from conduct 
C)  Through failure to make a timely disaffirmance 
D)  All of these.

Question 18

Intoxicated persons are liable in quasi contract for necessaries purchased during their incapacity.

Accepted Answer

A) True 
 B)False

Question 19

In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:

Accepted Answer

A)  state statute. 
B)  the UCC. 
C)  the facts and circumstances of the case. 
D)  common law, without regard to the unique facts of the case at hand. 
A)  state statute. 
B)  the UCC. 
C)  the facts and circumstances of the case. 
D)  common law, without regard to the unique facts of the case at hand.

Question 20

Compare the contractual liability of an intoxicated person to that of a person who is mentally ill. How are their situations similar? How are they different with regard to capacity?

Accepted Answer

The contracts of a person who is mentall

Exam 14: Contractual Capacity

Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda wishes to ratify this contract, Wanda:

Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy. This contract is:

At common law, a minor was a person who was under twenty-one years of age.

All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.

Sean had two beers and felt tipsy. He made a deal with Yoko to buy her stereo. He can avoid the contract because of lack of capacity.

Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority.

Which of the following would be a valid ratification? Two weeks after his eighteenth birthday, Jerry:

All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.

A mental illness or defect of one of the parties to a contract automatically makes a contract void.

A person taking a prescription medication will be treated the same as an incompetent under the cognitive ability test.

Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, Steve:

In some states, minors are liable for contracts involving bank accounts and student loans and cannot avoid these contracts even though they can avoid other types of contracts.

Which of the following is not true regarding the contracts of incompetent persons?

Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of intoxication's voluntary nature.

Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. Fay is:

Ratification can occur in which of the following ways?

Intoxicated persons are liable in quasi contract for necessaries purchased during their incapacity.

In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:

Compare the contractual liability of an intoxicated person to that of a person who is mentally ill. How are their situations similar? How are they different with regard to capacity?

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

Filters