Exam 13: Capacity and Genuine Assent

All of the following statements refer to an element of fraud except:

A minor cannot avoid a contract to purchase a car if the:

The seller of a painting is bound by the sales contract if the painting purchased was considered of little value and only later discovered to be valuable to the surprise of both buyer and seller.

Certain persons cannot make contracts that will bind them.

Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party.

Ratification consists of any words or conduct of a former minor manifesting an intent to be bound by the terms of a contract made while a minor.

A person who has drunk too much alcohol at a party and signs a contract may be able to rescind that contract.

A young stockbroker was rather overwhelmed by a flood of new clients. Assunta, one of his clients, had purchased XYZ Corp. stock through the broker at a price of $35 per share. The price had gone down to $29 by the time Assunta telephoned the broker. Assunta told the broker that she wanted to sell the stock if it went below $30 and inquired as to the price. The broker did not check the price, but thinking it could not have fallen below the $30 threshold, simply reassured Assunta that it was still "in the low 30s." Marta, Assunta's cousin, also had purchased XYZ stock at $35 per share and made a similar call to the broker and received the same response. Marta, however, coincidentally saw the price on a stock ticker tape when she hung up and realized the broker had made an error. Both Assunta and Marta held the stock and did not sell.?Later that same day, the stock price fell an additional $7 per share. Facing sizable losses, both Assunta and Martha decided to sue for fraud when Marta told Assunta of the broker's misstatement. Discuss the probable outcome of the lawsuits.

Jose visited a garage sale and found a baseball card collection which he believed was worth over $1,000. He bought the collection for $50.00 from Wanda. Later Jose discovered the collection was essentially worthless and demands his money back from Wanda. Must Wanda refund Jose's money?

A finding of undue influence would most likely not occur in a contract between:

Judy, a widow, just sold a piece of property. She will live off that money during her retirement. Judy dotes on her son, Chris, who asks her to invest her money in his restaurant, which is faltering. He tells her that if she does not lend him the money she will never see him again. She is afraid of being alone and agrees to his request, but soon changes her mind and asks for her money back. Chris claims they have formed a binding contract. What is your conclusion?

The "necessaries" of minors are precisely defined by law.

Status incapacities against married women have largely disappeared.

Ordinarily, every party to a contract is presumed to have contractual capacity until the contrary is shown.

Roberta, an educated person, purchased real estate from Maurice. Roberta did not read entirely the contract that she signed. As a result, she did not notice the provision in the contract about the interest imposed on the unpaid portion of the purchase price. She refused to pay the interest specified in the contract. Maurice sued her. Could he recover?

A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud.

When necessary medical care is provided to a minor, a parent is liable at common law for the medical expenses provided the minor child.

In which of the following cases is a contract between A and B binding?

John, a 17-year-old, purchased a ping-pong table and four new ping-pong paddles. A week after he turned 18, John tried to return the ping-pong paddles. He told the seller that he had decided to keep the table. Can John avoid the contract in this way?

Fraud requires a misstatement of either a fact or an opinion.