Exam 13: Capacity to Contract

The idea behind _____ is that adults who indicate an intent to be bound by contracts entered while still minors should be bound to those contracts and denied the right to disaffirm thereafter.

In a contract involving a minor, whether an item can be considered "necessary":

After staying home and raising four children, Mary got a job at a museum. Ten years later, she realized her marriage was in trouble and went for psychological counseling. She later separated from her husband but continued therapy. During a session at which her husband was present, he asked her, "What do you want?" She wrote on a piece of paper that she wanted the house, the car, the joint bank accounts, and a computer. The husband took the note to his attorney, who drafted a property settlement on its basis. Mary, ignoring the advice of her psychologist to hire her own attorney, signed the agreement. She later challenged the agreement on the grounds of incapacity. Will she succeed?

A person lacking mental capacity must return the other party to status quo when:

People lacking mental capacity are liable for the reasonable value of necessaries on the same basis and for the same reasons as minors.

Minors are liable for the value of necessaries they have purchased under a contract but have not received at the time they disaffirm.

Which of the following is true of the right to disaffirm?

In most states, the agreement of a person who has been adjudicated insane is _____.

A minor can typically disaffirm a contract made for _____.

In most states, the agreements of persons who have been adjudicated insane are void.

Generally, a minor may disaffirm by doing anything that clearly indicates to the other party an intent not to be bound by the terms of the contract.

A person could be periodically insane but enter a binding contract during a lucid moment.

A person suffering from mental impairment can have the legal capacity to contract if:

If a person is adjudicated insane after entering into a contract, his or her personal representative cannot ratify the contract.

If a court later finds that a person lacked mental capacity at the time the contract was entered into, the contract is _____.

People who regain their mental capacity:

On the same basis and for the same reasons as minors, people lacking mental capacity:

The minor who does not disaffirm within a reasonable time after attaining majority is held to have rescinded the contract.

When a person has been adjudicated insane, _____.

Why are minors held liable on a quasi contract basis for the reasonable value of necessaries furnished to them?