Exam 14: Contractual Capacity

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Compare the contractual liability of an intoxicated person to that of a person who is mentally ill.How are their situations similar? How are they different with regard to capacity?

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Question 1

Correct Answer:

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The contracts of a person who is mentally incompetent and is under a court-ordered guardianship are void.If a person is mentally incompetent but is not under guardianship, his contracts are voidable.A person may avoid any contract that he enters into if the other party has reason to know that, because of intoxication, he is unable to understand the nature and consequences of his actions or is unable to act in a reasonable manner.With either mental illness or intoxication, voidable contracts may be ratified when the person regains capacity.A court is more strict with contracts a party enters while intoxicated since the condition is voluntary.

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.

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(True/False)

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Question 2

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False

In general, minors have liability for their torts.

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Question 3

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True

Robert is 17 years old.He lies to Bouyers Auto in order to induce it to sell him a new pickup.Bouyers falls for this lie and sells him the pickup.In most jurisdictions, Robert:

(Multiple Choice)

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Question 4

Harold, a minor, decided to trade his 1985 truck on a new, late-model 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.

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Question 5

A minor can ratify part of a contract and disaffirm another part of it.

(True/False)

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Question 6

All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.

(True/False)

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Question 7

Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of intoxication's voluntary nature.

(True/False)

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Question 8

A person under guardianship by court order has no contractual capacity.

(True/False)

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Question 9

A person taking a prescription medication will be treated the same as an incompetent under the cognitive ability test.

(True/False)

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Question 10

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.

(True/False)

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Question 11

Name and briefly describe the three classes of persons who are legally limited in their capacity to contract.

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Question 12

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, Steve:

(Multiple Choice)

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Question 13

An intoxicated person must have been so intoxicated as to have been unable to understand the consequences of his actions or have been unable to act in a reasonable manner in order to avoid a contract.

(True/False)

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Question 14

Beth, at age 17, sells an antique pin she inherited.Even if the buyer resells the pin to someone who did not know that it was purchased from a minor, Beth can recover the pin from the third person if she changes her mind about wanting to sell it.

(True/False)

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Question 15

Ratification need not be express; it may be implied from the minor's conduct.

(True/False)

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Question 16

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

(Multiple Choice)

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Question 17

All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.

(True/False)

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Question 18

Ratification can occur in which of the following ways?

(Multiple Choice)

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Question 19

Sean had two beers and felt tipsy.He made a deal with Yoko to buy her stereo.He can avoid the contract because of lack of capacity.

(True/False)

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Question 20

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Exam 14: Contractual Capacity

Compare the contractual liability of an intoxicated person to that of a person who is mentally ill.How are their situations similar? How are they different with regard to 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.

In general, minors have liability for their torts.

Robert is 17 years old.He lies to Bouyers Auto in order to induce it to sell him a new pickup.Bouyers falls for this lie and sells him the pickup.In most jurisdictions, Robert:

A minor can ratify part of a contract and disaffirm another part of it.

All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.

Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of intoxication's voluntary nature.

A person under guardianship by court order has no contractual capacity.

A person taking a prescription medication will be treated the same as an incompetent under the cognitive ability test.

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.

Name and briefly describe the three classes of persons who are legally limited in their capacity to contract.

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, Steve:

An intoxicated person must have been so intoxicated as to have been unable to understand the consequences of his actions or have been unable to act in a reasonable manner in order to avoid a contract.

Beth, at age 17, sells an antique pin she inherited.Even if the buyer resells the pin to someone who did not know that it was purchased from a minor, Beth can recover the pin from the third person if she changes her mind about wanting to sell it.

Ratification need not be express; it may be implied from the minor's conduct.

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

All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.

Ratification can occur in which of the following ways?

Sean had two beers and felt tipsy.He made a deal with Yoko to buy her stereo.He can avoid the contract because of lack of capacity.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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