Exam 14: Contractual Capacity

Gibson, a minor, decided to trade his ten-year-old truck on a new car at the local dealership. One week after driving the new car, Gibson decides that he cannot afford the payments. Gibson now wishes to disaffirm his purchase and get his old truck back. The dealer informs Gibson that the truck has been sold. Can Gibson get the old truck back and disaffirm his contract with the dealer? Explain.

Oswald, a minor, makes a contract with Albert, an adult, to buy a motorcycle. One week later, Oswald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the motorcycle next week. In this case:

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

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

Michelle is 17 years old and earns extra money by repairing cars. Nathan, who is 21, brings his car to Michelle for repairs, and Michelle ruins the brake system of the car because of her inexperience. If Nathan sues Michelle for negligence in performing the auto repair contract, in most states Michelle will have no liability, because the tort of negligence and the auto repair contract are connected.

Under the Uniform Commercial Code, when the minor has sold goods and the buyer has resold them to a good faith purchaser for value:

At common law, a minor was a person who was under the age of twenty-one years.

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.

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:

When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party enters into a contract with the minor:

What are the two tests for mental competency?

The case of In re The Score Board, Inc. involved the issue of:

Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, is twice the reasonable value of that mobile home. Several months later, Percy wants to disaffirm the contract. If the mobile home is considered a necessary item:

Robert Briscoe is 17 years old. He lies to Bouyers Auto about his age in order to induce them to sell him a new pickup truck. Bouyers falls for this lie and sells him the pickup. Under the prevailing view, Robert:

Compare the 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 contractual capacity?

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

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

Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Randy may:

Disaffirmance must be express; it may not be implied.

While she was 17, Trina purchases a laptop computer. Discuss the implications of her actions as to whether she can disaffirm the contract of purchase if she: (a) tries to sell the computer one year later; (b) continues to use the computer for eighteen months; or (c) has not yet made all of the payments when she turns 18, but continues to make monthly payments.