Exam 12: Capacity and Legality

Julie buys an auto from John when she is 17.When she turns 21,Julie decides that she does not want the automobile.The age of majority in Julie's state is 18.Can Julie disaffirm this contract?

Harry and Wanda have been married for 10 years,and while it might not have been wedded bliss,it hasn't been bad either.Harry,meanwhile,has developed a romantic interest in someone else.Wanda dearly loves Harry and fears that he will leave her.Furthermore,she fears that raising their three children on her own will be too much.After much discussion and a couple of those expensive bottles of wine that come with a cork,Wanda and Harry sign the following agreement: 1.I,Harry,will no longer have any association with Doris,who I admit to spending too much time with,given that I am married. 2.I,Harry,will help Wanda in the raising of our three children. 3.I,Harry,give up any right to divorce Wanda prior to our children completing their formal education. 4.I,Wanda,will be a loving wife to my dear Harry. 5.I,Wanda,will give Harry $200,000 of the inheritance I received from my late great-aunt,once our children have completed their formal education. Harry stays married to Wanda,and all three children complete their college education.Harry has sued Wanda seeking a divorce.Harry wants the $200,000,but Wanda does not want to pay it.How would a court analyze this case,and what is the likely outcome? Assume that under the state law where Harry and Wanda live,Harry would have no right to any of Wanda's inheritance before signing the contract.

If a minor buys an item and then disaffirms the contract,and a court orders the minor to merely return the item in its present condition in order to get a refund,this minor has the duty of:

Generally,which of the following statements relating to contractual capacity is correct?

A contract provision that relieves a party to the contract from liability is known as:

When Harry met Sally last month,he fell in love.Unfortunately Sally did not.He has appeared at her door twice daily since then to ask her to go on a sailing vacation.Sally has repeatedly told Harry to leave her alone,but he ignores that.Finally,Sally said,"I'll give you $100 if you never come here again." Harry left Sally alone for two months and then demanded the $100,which Sally refuses to pay.Which is true?

Juan owns a house in a poor area of a large city.A salesman visits his home,selling aluminum siding.Juan buys and signs a contract,which calls for a price of $25,000 to be paid in monthly installments of $500 for 20 years.Juan only earns $700 per month.In addition,Juan's home is only worth about $35,000.The aluminum siding put on is worth no more than $1,500.Juan speaks and reads very little English and Juan thought he was signing a receipt for a free gift.Which of the following best describes this contract?

At age 16,Phil bought a car from Acme Auto Co.for $2,500.Phil drove the car for about six months,and then he had an accident.The damage to the auto was $1,500.In addition,the value of the auto before the accident was only $2,000.The accident was not Phil's fault.Phil wishes to disaffirm the contract.Which of the following best describes this situation?

A court's only remedy upon finding that a contract is unconscionable is to not enforce it.

Under common law,the parties to an illegal contract were considered to be:

A computer retailer sells some computer games to a minor.This contract is:

To disaffirm a contract,a minor must act before reaching the age of majority.

Generally,the courts will not enforce an illegal contract,but will leave the parties where it finds them.

The courts have very broad powers to enforce or not enforce certain types of contracts.Which of the following statements best describes this power?

Arthur had been adjudicated insane.During his period of insanity,Arthur sold some unimproved real estate to Katrina for $5,000,its fair value.Katrina did not know that Arthur was insane.In fact,he acted perfectly normal in every way.Arthur spends this $5,000.Arthur's guardian learns of this transaction and sues to void the contract and recover the land.What results?

Each state has its own list of the items that are considered necessaries and such a list would then apply to all minors in that state.

Anthony contracted with a company to participate in a shark feeding excursion.He signed an exculpatory clause as one of the contract provisions at the time that he signed up.He was later injured by a shark during the dive.He wants to sue the company for his injuries.What is the most likely result?

If a contract or contract clause is found to be unconscionable,the courts can do which of the following?

Ginger is a Certified Public Accountant in practice by herself in Centerville.She merges her practice with that of Heap,Big,and Co.Part of the merger agreement states that if Ginger should ever leave Heap,Big,and Co.,she promises not to practice public accounting in Centerville for a period of five years after leaving.Discuss the requirements for a valid covenant not to compete and discuss whether or not this particular covenant is enforceable.

Andrea is a real estate agent; however,she does not have a license as required by statue.Andrea sells a piece of property for George,but George refuses to pay her the agreed commission.Andrea sues George.What results?