Question 1

Which of the following is true of contracts involving intoxicated parties?

Accepted Answer

A) The rules are similar to the ones for people with a mental incapacity. 
B) Courts are generally sympathetic to people involved in such contracts. 
C) A person incapacitated by intoxication can disaffirm at any period of time. 
D) In most such cases,people have escaped their contractual obligations. 
A) The rules are similar to the ones for people with a mental incapacity. 
B) Courts are generally sympathetic to people involved in such contracts. 
C) A person incapacitated by intoxication can disaffirm at any period of time. 
D) In most such cases,people have escaped their contractual obligations.

Question 2

Which of the following is a criticism of the traditional rule of restitution in the case of minors who have disaffirmed a contract?

Accepted Answer

A) It allows adults to ratify a contract with a minor. 
B) It allows a minor to be exploited in a contract. 
C) It does not allow a minor to disaffirm a bargain. 
D) It is harsh on innocent adults who have dealt fairly with minors. 
A) It allows adults to ratify a contract with a minor. 
B) It allows a minor to be exploited in a contract. 
C) It does not allow a minor to disaffirm a bargain. 
D) It is harsh on innocent adults who have dealt fairly with minors.

Question 3

Kenny,aged 17 years,11 months,buys a used car on credit.The contract also includes a service agreement obligating the seller to perform certain maintenance on the car for one year.Kenny makes five monthly payments in the five months after he turns 18.In addition,he has the seller service the car on four separate occasions.After making the fifth payment,Kenny announces that he wants to disaffirm,i.e. ,return the car and get back the full price.Can Kenny disaffirm?

Accepted Answer

It seems unlikely that Kenny can disaffi

Question 4

Minors have the capacity to enter into contracts.

Accepted Answer

A) True 
 B)False

Question 5

A minor entered into a contract with GAM & Co.When he attains the age of majority,he wishes to enforce the contract.The adult party must:

Accepted Answer

A) perform the contract. 
B) rescind the contract. 
C) abandon the contract. 
D) ratify the contract. 
A) perform the contract. 
B) rescind the contract. 
C) abandon the contract. 
D) ratify the contract.

Question 6

Payne entered into a written agreement to sell a parcel of land to Stevens.At the time the agreement was executed,Payne had consumed alcoholic beverages.Payne's ability to understand the nature and terms of the contract was not impaired.Stevens did not believe that Payne was intoxicated.The contract is:

Accepted Answer

A) void as a matter of law. 
B) legally binding on both parties. 
C) voidable at Payne's option. 
D) voidable at Stevens' option. 
A) void as a matter of law. 
B) legally binding on both parties. 
C) voidable at Payne's option. 
D) voidable at Stevens' option.

Question 7

In general,contracts made by mentally impaired persons:

Accepted Answer

A) can sometimes be ratified. 
B) are unconditionally void. 
C) are unconditionally voidable. 
D) are voidable only if they involve necessaries. 
A) can sometimes be ratified. 
B) are unconditionally void. 
C) are unconditionally voidable. 
D) are voidable only if they involve necessaries.

Question 8

In the case in the text,Zelnick v.Adams,why did the court decide legal services were not necessary for the minor's "position and condition" under the circumstances?

Accepted Answer

A) There were other methods of relief for the minor instead of costly legal action. 
B) The evidence was clear that the minor did not have a claim against the trust. 
C) Any interest the minor had in the trust would not be realized for many years. 
D) The minor had parents willing and able to pay legal fees. 
A) There were other methods of relief for the minor instead of costly legal action. 
B) The evidence was clear that the minor did not have a claim against the trust. 
C) Any interest the minor had in the trust would not be realized for many years. 
D) The minor had parents willing and able to pay legal fees.

Question 9

In almost all states,the age of majority for contracting is ________.

Accepted Answer

A) 18 
B) 19 
C) 20 
D) 21 
A) 18 
B) 19 
C) 20 
D) 21

Question 10

The terms infants and minors refer to the same class of people.

Accepted Answer

A) True 
 B)False

Question 11

A contract made by a person who has been adjudicated to be insane and institutionalized or put under a guardian's care is void rather than voidable.

Accepted Answer

A) True 
 B)False

Question 12

Tracy,aged 12,is named the sole inheritor of her family mansion,which is valued to be worth millions.She has disaffirmed the agreement on the advice of her uncle and guardian Pete.This automatically transfers the title to the latter.Which of the following statements is true of the case?

Accepted Answer

A) Tracy cannot disaffirm until she has reached majority. 
B) Tracy's decision will be allowed by the family courts. 
C) Pete has every right to Tracy's property and can take legal possession of it. 
D) Tracy's decision is valid as long as it is in writing. 
A) Tracy cannot disaffirm until she has reached majority. 
B) Tracy's decision will be allowed by the family courts. 
C) Pete has every right to Tracy's property and can take legal possession of it. 
D) Tracy's decision is valid as long as it is in writing.

Question 13

Sarah is 16 years old.She left home at age 15;her parents no longer support her.Sarah entered into a contract with Best Groceries for the purchase of $100 of groceries on credit.The groceries consisted of basic,necessary items.However,their reasonable value is only $80.If Sarah discovers that she has been overcharged and refuses to pay,Best Groceries is entitled to collect:

Accepted Answer

A) nothing. 
B) $80. 
C) $100. 
D) $90. 
A) nothing. 
B) $80. 
C) $100. 
D) $90.

Question 14

Which of the following characterizes the effect of incapacity caused by mental impairment?

Accepted Answer

A) A person formerly incapacitated by mental impairment cannot ratify a contract if he/she regains his capacity. 
B) If a contract is found to be voidable on the ground of mental impairment,the person who lacked capacity at the time the contract was made has the right to disaffirm the contract. 
C) If a court has found a person mentally incompetent after holding a hearing on his mental capacity and has appointed a guardian for him,the contract is considered voidable. 
D) The contracts of people who are suffering from a mental defect at the time of contracting are usually considered to be void. 
A) A person formerly incapacitated by mental impairment cannot ratify a contract if he/she regains his capacity. 
B) If a contract is found to be voidable on the ground of mental impairment,the person who lacked capacity at the time the contract was made has the right to disaffirm the contract. 
C) If a court has found a person mentally incompetent after holding a hearing on his mental capacity and has appointed a guardian for him,the contract is considered voidable. 
D) The contracts of people who are suffering from a mental defect at the time of contracting are usually considered to be void.

Question 15

Betty,age 16,buys a car and wrecks it one week later.She takes it back to the seller and demands all of her money back.According to the traditional rule,is she entitled to get all of her money back?

Accepted Answer

A) Yes,regardless of the condition of the car,because this was a void contract. 
B) Yes,regardless of the condition of the car,because this was a voidable contract. 
C) No,she is entitled to no remedy in this situation. 
D) No,she is entitled to get some money back but less the value of the damage to the car. 
A) Yes,regardless of the condition of the car,because this was a void contract. 
B) Yes,regardless of the condition of the car,because this was a voidable contract. 
C) No,she is entitled to no remedy in this situation. 
D) No,she is entitled to get some money back but less the value of the damage to the car.

Question 16

A person who lacked capacity to contract due to mental impairment can ratify the contract once he/she regains his/her normal mental faculties.

Accepted Answer

A) True 
 B)False

Question 17

In most states,the mere fact that a minor is ________ does not give him the capacity to contract.

Accepted Answer

A) living on his own 
B) emancipated 
C) paying his own expenses. 
D) not in contact with his parents. 
A) living on his own 
B) emancipated 
C) paying his own expenses. 
D) not in contact with his parents.

Question 18

Courts will ________ allow a person to escape his contractual obligations on the ground of intoxication.

Accepted Answer

A) rarely 
B) often 
C) always 
D) never 
A) rarely 
B) often 
C) always 
D) never

Question 19

Under the Restatement (Second)of Contracts,intoxication will make a contract voidable if the other party has reason to know that the intoxicated person is so intoxicated that he/she cannot understand or act reasonable in relation to the transaction.

Accepted Answer

A) True 
 B)False

Question 20

Emancipation is a formal agreement in writing to terminate a parent's right to control a child and receive services from him.

Accepted Answer

A) True 
 B)False

Exam 14: Capacity to Contract

Which of the following is true of contracts involving intoxicated parties?

Which of the following is a criticism of the traditional rule of restitution in the case of minors who have disaffirmed a contract?

Minors have the capacity to enter into contracts.

A minor entered into a contract with GAM & Co.When he attains the age of majority,he wishes to enforce the contract.The adult party must:

In general,contracts made by mentally impaired persons:

In the case in the text,Zelnick v.Adams,why did the court decide legal services were not necessary for the minor's "position and condition" under the circumstances?

In almost all states,the age of majority for contracting is ________.

The terms infants and minors refer to the same class of people.

A contract made by a person who has been adjudicated to be insane and institutionalized or put under a guardian's care is void rather than voidable.

Tracy,aged 12,is named the sole inheritor of her family mansion,which is valued to be worth millions.She has disaffirmed the agreement on the advice of her uncle and guardian Pete.This automatically transfers the title to the latter.Which of the following statements is true of the case?

Which of the following characterizes the effect of incapacity caused by mental impairment?

Betty,age 16,buys a car and wrecks it one week later.She takes it back to the seller and demands all of her money back.According to the traditional rule,is she entitled to get all of her money back?

A person who lacked capacity to contract due to mental impairment can ratify the contract once he/she regains his/her normal mental faculties.

In most states,the mere fact that a minor is ________ does not give him the capacity to contract.

Courts will ________ allow a person to escape his contractual obligations on the ground of intoxication.

Under the Restatement (Second)of Contracts,intoxication will make a contract voidable if the other party has reason to know that the intoxicated person is so intoxicated that he/she cannot understand or act reasonable in relation to the transaction.

Emancipation is a formal agreement in writing to terminate a parent's right to control a child and receive services from him.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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