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

A minor, upon reaching the age of majority, must ratify none or all parts of a contract.

Accepted Answer

A) True 
 B)False  True

Question 3

While many states have repealed their former laws restricting the capacity of a convict to contract, some states still have restrictions.

Accepted Answer

A) True 
 B)False  True

Question 4

​ The law considers everyone under the age of twenty-one to be a minor.

Accepted Answer

A) True 
 B)False

Question 5

The law is uniform throughout the United States in binding minors on contracts induced by misrepresenting their age.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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

Question 8

​ 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 9

What precaution can a business person take when contracting with a minor?

Accepted Answer

A) A business person can require an adult to join the contract as a cosigner. 
B) A business person can prohibit a minor from disaffirming the contract. 
C) A business person can require the contract to be a simple contract. 
D) A business person can limit business to online business transactions. 
A) A business person can require an adult to join the contract as a cosigner. 
B) A business person can prohibit a minor from disaffirming the contract. 
C) A business person can require the contract to be a simple contract. 
D) A business person can limit business to online business transactions.

Question 10

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 11

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 but will be required to pay a reasonable amount to avoid unjust enrichment. 
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 but will be required to pay a reasonable amount to avoid unjust enrichment. 
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 12

The term disaffirmation refers to:

Accepted Answer

A) the indication by an adult that a contract made while a minor is binding. 
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 
D) the election to avoid a contract or set it aside. 
A) the indication by an adult that a contract made while a minor is binding. 
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 
D) the election to avoid a contract or set it aside.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

Ratification means indicating one's will

Question 15

​ Which of the following is true of a contract between two minors?

Accepted Answer

A) Only the person of a lower age has the right to avoid the contract. 
B) Each minor has the right to avoid the contract. 
C) Each minor is bound by the contract 
D) Each minor is bound until he or she reaches the age of majority. 
A) Only the person of a lower age has the right to avoid the contract. 
B) Each minor has the right to avoid the contract. 
C) Each minor is bound by the contract 
D) Each minor is bound until he or she reaches the age of majority.

Question 16

Contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts are:

Accepted Answer

A) void. 
B) voidable. 
C) valid. 
D) quasi-contracts. 
A) void. 
B) voidable. 
C) valid. 
D) quasi-contracts.

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.

A minor, upon reaching the age of majority, must ratify none or all parts of a contract.

While many states have repealed their former laws restricting the capacity of a convict to contract, some states still have restrictions.

​ The law considers everyone under the age of twenty-one to be a minor.

The law is uniform throughout the United States in binding minors on contracts induced by misrepresenting their age.

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?

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

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

What precaution can a business person take when contracting with a minor?

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

The term disaffirmation refers to:

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

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

​ Which of the following is true of a contract between two minors?

Contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts are:

Introduction to Law

Courts and Court Procedures

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 Contracts

Warranties Product Liability and Consumer Protection

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties, Holders in Due Course and Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Introduction to Business Organizations

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corporation

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 Trust

Filters

The law considers everyone under the age of twenty-one to be a minor.

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

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

Which of the following is true of a contract between two minors?