Exam 14: Contractual Capacity

If Carrie, age 14, contracted to buy a fur coat by mail, the coat manufacturer would not have to send it since the contract was void.

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 the skis to Sharon and disaffirmed the contract.Fay is:

If a person with a mental condition that impairs her ability to act in a reasonable manner enters a contract that is grossly unfair, the contract is voidable.

Which of the following is untrue regarding the contracts of incompetent persons?

The minority of states require that the minor, when effecting a disaffirmance of the contract, pay at least a reasonable amount for the use of the property or the amount by which the property depreciated while in the hands of a minor.

Discuss a minor's duty to a seller upon disaffirmance of a contract for the sale of goods.

Cornelio purchases an SUV from Barron Auto Sales.Cornelio is only 17 years of age.He wrecks the vehicle while off-roading and attempts to disaffirm the contract and have Barron repay him all that he has paid.In the majority of jurisdictions, Cornelio :

If a minor sells property that the buyer then resells to a good faith purchaser for value and the minor then disaffirms the sales contract, under both the traditional view and the UCC, the minor can recover the property from the good faith purchaser for value since the minor has the power of avoidance and both purchasers had only voidable title.

Fourteen-year-old Marsha bought $120 worth of video games at a local store, using her own money.Her parents insisted that she return the items and get her money back.Which of the following is true?

Joanne, a minor, sold her laptop computer to Bruce, an adult.Bruce then sold the laptop to Anna, also an adult, who had no knowledge of the fact that the original owner was a minor.Under the Uniform Commercial Code, Joanne may:

Cheryl, age 16, ordered a new dress to wear to the school prom.She has contracted to pay $500 when the dress arrives.Before the dress arrives, Cheryl decides that the dress is too expensive, and she now wishes to cancel the order.Cheryl:

In which of the following situations would a minor be unable to disaffirm a contract which he had made?

Sixteen-year-old Todd's parents provide adequate food, lodging, and clothing for him, but he sees a sweater he wants and purchases it.In all states, the sweater is considered a necessary since it is an item of clothing.

By the majority view, a minor need only return any property he has received from the other party if the minor wishes to disaffirm the contract.He has no duty to return the property in the same condition in which he received it.

Cheryl is a 17-year-old high school student who was elected homecoming queen and does part-time modeling to earn money for college.She has an important interview with a modeling agency and wants to make a good impression, so she withdraws $5,000 from her savings and buys a designer outfit and a fur coat for the interview.A week later, she returns the coat to the department store and says she would like her money back.The store is reluctant to take the items.What are Cheryl's rights? Explain.

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.

Tim, who is a minor, enters into a contract with Violet, who is an adult.Which of the following is correct?

A mental condition that impairs a person's ability to act in a reasonable manner is one type of mental incompetence.

In the First State Bank of Sinai v.Hyland case, the Supreme Court of South Dakota held:

If a person is unable to understand the nature and effect of entering into a contract, he or she can avoid it.