Question 1

Contracts made by people who were intoxicated to such an extent that they would not have entered into it if they were sober, makes the contract voidable.

Accepted Answer

A) True 
 B)False  False

Question 2

The term disaffirmation refers to:

Accepted Answer

A)  the election to avoid a contract or set it aside. 
B)  the process of executing terms of a contract in an unscrupulous manner. 
C)  willingness by a person to be bound by the terms of a contract. 
A)  the election to avoid a contract or set it aside. 
B)  the process of executing terms of a contract in an unscrupulous manner. 
C)  willingness by a person to be bound by the terms of a contract. A

Question 3

If an adult purchases personal property from a minor, the minor has only a voidable title to the property.

Accepted Answer

A) True 
 B)False  False

Question 4

Even if a minor does not have possession of property received under a contract, the contract can be disaffirmed.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true of the ratification of a minor's contracts?

Accepted Answer

A)  A minor can ratify a voidable contract only if he/she is of legal age. 
B)  Silence ratifies an executed contract after a minor attains majority. 
C)  Ratification of a contract is plausible only if the minor has completed high school. 
D)  A minor is allowed to ratify one part of a contract and disaffirm another. 
A)  A minor can ratify a voidable contract only if he/she is of legal age. 
B)  Silence ratifies an executed contract after a minor attains majority. 
C)  Ratification of a contract is plausible only if the minor has completed high school. 
D)  A minor is allowed to ratify one part of a contract and disaffirm another.

Question 6

A minor may ratify a voidable contract only after attaining majority. Explain.

Accepted Answer

Ratification means indicating one's will

Question 7

A person who has been legally declared to be a habitual drunkard is not liable for the reasonable value of necessaries furnished.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true of contracts of minors?

Accepted Answer

A)  A contract between two minors gives the person of higher age the right to avoid it. 
B)  An adult is bound by a contract if a minor wishes to treat the contract as valid. 
C)  An adult can avoid a contract on the ground that the minor might avoid it. 
D)  A minor does not have the power to avoid or repudiate any contract. 
A)  A contract between two minors gives the person of higher age the right to avoid it. 
B)  An adult is bound by a contract if a minor wishes to treat the contract as valid. 
C)  An adult can avoid a contract on the ground that the minor might avoid it. 
D)  A minor does not have the power to avoid or repudiate any contract.

Question 9

A contract between two minors gives the person of higher age the right to avoid it.

Accepted Answer

A) True 
 B)False

Question 10

Specially enforced contracts such as student loan agreements are voidable contracts.

Accepted Answer

A) True 
 B)False

Question 11

Patrick and Ken enter into a contract in which Ken sells his farm to Patrick. According to the contract, Patrick needs to pay $500 to Ken every month for the next ten years in order to settle the purchase. Later, it is found that Ken purposely caused Patrick to become drunk so that he would enter into the contract. Which of the following is most likely to be a consequence of this case?

Accepted Answer

A)  Patrick will not need to pay Ken because the contract will be held invalid. 
B)  Patrick will need to pay a reasonable amount to Ken because housing is a necessity. 
C)  Ken will need to choose whether to affirm or disaffirm the contract. 
D)  Regardless of the intensity of intoxication, Patrick will be required to pay the contract amount because he signed the contract. 
A)  Patrick will not need to pay Ken because the contract will be held invalid. 
B)  Patrick will need to pay a reasonable amount to Ken because housing is a necessity. 
C)  Ken will need to choose whether to affirm or disaffirm the contract. 
D)  Regardless of the intensity of intoxication, Patrick will be required to pay the contract amount because he signed the contract.

Question 12

Which of the following conditions is a prerequisite for any agreement to be legally enforceable?

Accepted Answer

A)  The parties entering into the agreement must be over the age of thirty five. 
B)  The agreement must be made in a court of law. 
C)  The parties entering into the agreement must have the mental capacity to contract. 
D)  The agreement must be signed in the presence of a third party who witnessed the proceedings. 
A)  The parties entering into the agreement must be over the age of thirty five. 
B)  The agreement must be made in a court of law. 
C)  The parties entering into the agreement must have the mental capacity to contract. 
D)  The agreement must be signed in the presence of a third party who witnessed the proceedings.

Question 13

Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house. Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract?

Accepted Answer

A)  Martha was not aware of Sam's mental condition while signing the contract. 
B)  Martha will incur a huge loss if the contract is held invalid. 
C)  Sam was in a sane frame of mind and understood the contract when he signed it. 
D)  Sam signed the contract on his own and was not forced to do so. 
A)  Martha was not aware of Sam's mental condition while signing the contract. 
B)  Martha will incur a huge loss if the contract is held invalid. 
C)  Sam was in a sane frame of mind and understood the contract when he signed it. 
D)  Sam signed the contract on his own and was not forced to do so.

Question 14

Kenneth, aged sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true?

Accepted Answer

A)  Sarah can obtain good title to the property. 
B)  Kenneth can recover a portion of the property's value from Sarah. 
C)  Kenneth is a minor and thus cannot recover money from Robin. 
D)  Robin will still be held as the legal owner of the property. 
A)  Sarah can obtain good title to the property. 
B)  Kenneth can recover a portion of the property's value from Sarah. 
C)  Kenneth is a minor and thus cannot recover money from Robin. 
D)  Robin will still be held as the legal owner of the property.

Question 15

A minor must ratify none or all parts of a contract.

Accepted Answer

A) True 
 B)False

Question 16

A minor has the legal right to disaffirm a voidable contract at any time during minority.

Accepted Answer

A) True 
 B)False

Question 17

Ratification to a contract can be made any time before reaching majority.

Accepted Answer

A) True 
 B)False

Question 18

The safest way to contract with minors is to have the minor's guardian join in the contract as a cosigner.

Accepted Answer

A) True 
 B)False

Question 19

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that:

Accepted Answer

A)  the minor is not required to pay the contract price. 
B)  the firm does not need to pay the minor because the contract is voidable. 
C)  the minor must pay the contract price to prevent the firm from being unjustly enriched. 
D)  the minor's parent or spouse needs to pay the reasonable value of what was received. 
A)  the minor is not required to pay the contract price. 
B)  the firm does not need to pay the minor because the contract is voidable. 
C)  the minor must pay the contract price to prevent the firm from being unjustly enriched. 
D)  the minor's parent or spouse needs to pay the reasonable value of what was received.

Question 20

If two minors enter into a contract, each has the right to avoid it.

Accepted Answer

A) True 
 B)False

Exam 7: Capacity to Contract

Contracts made by people who were intoxicated to such an extent that they would not have entered into it if they were sober, makes the contract voidable.

The term disaffirmation refers to:

If an adult purchases personal property from a minor, the minor has only a voidable title to the property.

Even if a minor does not have possession of property received under a contract, the contract can be disaffirmed.

Which of the following statements is true of the ratification of a minor's contracts?

A minor may ratify a voidable contract only after attaining majority. Explain.

A person who has been legally declared to be a habitual drunkard is not liable for the reasonable value of necessaries furnished.

Which of the following is true of contracts of minors?

A contract between two minors gives the person of higher age the right to avoid it.

Specially enforced contracts such as student loan agreements are voidable contracts.

Which of the following conditions is a prerequisite for any agreement to be legally enforceable?

Kenneth, aged sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true?

A minor must ratify none or all parts of a contract.

A minor has the legal right to disaffirm a voidable contract at any time during minority.

Ratification to a contract can be made any time before reaching majority.

The safest way to contract with minors is to have the minor's guardian join in the contract as a cosigner.

If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that:

If two minors enter into a contract, each has the right to avoid it.

Introduction to Law

Courts and Court Procedure

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Con

Warranties, Product Liability, and Cons

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties and Holders in Due Course

Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Labor Legislation

Introduction to Business Organization

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corpora

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills, Inheritances, and Trusts

Filters