Question 1

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.

Accepted Answer

A) True 
 B)False  False

Question 2

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:

Accepted Answer

A)   still liable since she had to disaffirm before her 18th birthday.
B)   still liable because selling the skis amounted to a ratification.
C)   still liable because she used the skis.
D)   not liable because skis are not necessaries. B

Question 3

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.

Accepted Answer

A) True 
 B)False  True

Question 4

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

Accepted Answer

A)   An incompetent person is liable for necessaries.
B)   Unlike a minor, an incompetent person can never ratify a contract.
C)   To avoid a contract, a person need not be permanently incompetent.
D)   Under the cognitive ability test, a person is incompetent if he is unable to understand the nature and effect of his act.

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

The answer of Discuss a minor's duty to a seller...

Question 7

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 :

Accepted Answer

A)   would be out of luck.
B)   must have the SUV repaired.
C)   will receive his money less the depreciation in value of the vehicle.
D)   may simply return the vehicle and get his money.

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

A)   If there is a conflict, the store's return policy will override Marsha's right of disaffirmation.
B)   In most jurisdictions, Marsha may get her money back only if she has not opened or damaged the merchandise in any way.
C)   In a majority of jurisdictions, Marsha may get her money back even if she cannot return the merchandise.
D)   In most jurisdictions, Marsha may get some of her money back but she must pay the reasonable value of the goods if that differs from the contract price.

Question 10

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:

Accepted Answer

A)   avoid her contract with Bruce and recover her laptop.
B)   not avoid her contract with Bruce and may not recover her laptop.
C)   register with the UCC filing department and require that if Anna sells the laptop she must give Joanne the rights of first refusal.
D)   recover the money that Bruce got from selling the laptop to Anna.

Question 11

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:

Accepted Answer

A)   must pay $500 for the dress because the dress was specially ordered for her.
B)   must pay $500 for the dress because clothing is classified as a necessary.
C)   may disaffirm this executory contract because, while clothing in general is classified as a necessary, a new prom formal would probably not be classified as a necessary.
D)   must accept the dress and pay the reasonable value of the dress.

Question 12

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

Accepted Answer

A)   Upon restoring the consideration received in a situation involving a fully executed contract.
B)   Where real property is involved, upon reaching the age of majority.
C)   During the time of his minority or for a reasonable time thereafter.
D)   Where the minor wishes to perform part of a contract and disaffirm another part of the same contract.

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

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.

Accepted Answer

The answer of Cheryl is a 17-year-old high school student...

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)   Violet may not disaffirm the contract.
B)   Violet may disaffirm the contract at any time.
C)   Violet may disaffirm the contract when Tim becomes an adult.
D)   Tim may ratify the contract at any time during his minority.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   Mervin's obligation on a promissory note was void due to his alcohol-related incapacity.
B)   Mervin ratified his voidable contract by conduct, making it a fully valid legal obligation.
C)   the alcohol intoxication of a party to a contract does not affect the contract's enforceability.
D)   Mervin could only use express language to ratify a contract formed while he was incapacitated by alcohol use.

Question 20

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

Accepted Answer

A) True 
 B)False

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 :

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.

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.