Exam 14: Contractual Capacity

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.

Trina, while 17, purchases a laptop computer.Discuss the implications of her actions as to whether she can disaffirm the contract of purchase if she: (a) tries to sell the computer one year later; (b) continues to use the computer for eighteen months; or (c) has not yet made all of the payments when she turns 18, but continues to make monthly payments.

Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000.This price, however, is twice the reasonable value of that mobile home.One month later, Percy wishes to disaffirm the contract.If the mobile home is considered a necessary, then:

Which of the following is least likely to be classified as a necessary for which a minor will be held liable on a contract?

What is the doctrine of liability for a tort connected with a contract?

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.

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

A binding promise or agreement requires that the parties to the agreement have contractual capacity.

Under the Uniform Commercial Code, when the minor has sold goods and the buyer has resold them to a good faith purchaser for value:

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.What result?

A disaffirmance must come either during a minor's minority or within a reasonable time after he reaches majority.

Disaffirmance must be express.

Wanda at age 17 purchased an expensive sound system from Music World.If Wanda wishes to ratify this contract, Wanda:

Maureen is taking a prescribed medication which makes her drowsy and inattentive.Any contracts she makes:

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, what would happen?

When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party acting in good faith enters into a contract with the minor:

Harold, a minor, decided to trade his 1985 truck on a new car at the local dealership.One week after driving the new car, Harold decides that he cannot afford the payments.Harold now wishes to disaffirm his purchase and get his old truck back.The dealer informs Harold that the truck has been sold.Can Harold get the old truck back and disaffirm his contract with the dealer? Explain.

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

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.

Ratification of a contract, once effected, is final and cannot be withdrawn.