Exam 15: Voidable Contracts: Capacity and Consent

Travis had too many beers at the baseball game.Ed realized Travis was so intoxicated he wouldn't know what he was doing,so he got Travis to sign a promise to sell his motorcycle to Ed for $50.When Travis gets sober,he can attempt to void the contract.

Which of the following is NOT a true statement about fraud?

Jeff was a subcontractor,bidding on a contract for ACE Corp. ,the general contractor.When adding up the total of materials and labor,Jeff's secretary mistakenly moved the decimal point one place,ending up with a bid of $3,500 rather than $35,000.ACE Corp.accepted Jeff's bid,mostly because all the other bids were over $30,000.When Jeff learns of the mistake,he tells ACE Corp.that he cannot do the job for $3,500.If ACE Corp.sues to enforce this contract,what is the most likely result?

Marty,a 16-year-old,contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.He agreed to make monthly payments until the purchase price plus interest were paid in full.It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 18.Which of the following is correct?

If a minor can cancel a contract,it can be done at any time before the minor reaches the age of majority or within a reasonable time after reaching majority age.

Ron,a minor,goes to the hospital for treatment of the flu.On the new-patient form Ron signs,he agrees to pay for any care or treatment he receives.When billed for the treatment,

Which scenario is an example of puffery?

Alejandro was new in town and was considering buying Helen's house.The paint was peeling off the exterior and most of the windows were broken,but Helen did not make a point of mentioning these defects.Alejandro bought the house,but the following month he attempted to rescind the contract because Helen had not explicitly pointed out these cosmetic problems.What will the likely outcome be?

Mrs.Elsley was an elderly woman who relied on Nancy to visit her every day and prepare her meals.Nancy convinced Mrs.Elsley that she should give Nancy her house so they could live together and Nancy could better care for her,although Nancy really just wanted the house and had no intention of moving in to take care of Mrs.Elsley.Although Mrs.Elsley agreed,she may rescind the contract because of undue influence.

An example of the type of relationship required to find undue influence would be

Frank suffers from a mental impairment due to a brain injury from a airplane accident.He contracts with Glena to purchase her dining room furniture.A month later,he tries to void the contract.If he is unable to return the furniture,a court will not rescind the agreement unless Frank can show that Glena acted in bad faith.

A(n)_______ contract is illegal from the beginning and may not be enforced by either party;a(n)_______ contract is legal but permits one party to escape,if he or she so wishes.

Reed,a 15-year-old,has run out of money while on a trip away from home.Martha gives him food,a place to sleep,and his bus fare home,in exchange for Reed's promise to pay $200 after he got home.Is Reed's promise enforceable?

Marty,a 16-year-old,contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.Marty agrees to make monthly payments until the purchase price plus interest is paid in full.Which of the following is correct?

When fraud is committed during the sale of goods,all states allow the remedy of rescinding a contract while still allowing the remedy of suing for damages.

Larson entered Forrester's Auto Mart to purchase a used car.Larson found a vehicle with a sales price of $11,000.After Forrester answered all of Larson's questions,Forrester and Larson agreed to a sale.As Larson was leaving to get the money to pay for the car,Forrester told Larson that he thought Robert Redford formerly owned the car.Larson later learned that Robert Redford had never owned the car.If Larson seeks to rescind the deal based on Forrester's statement,Larson will

What is the difference between a unilateral mistake and a mutual mistake? Under what circumstances will a court refuse to rescind a contract based on the defense of a "mistake"?

A person who is mentally impaired generally can create only __________ contracts.

When courts consider economic duress,they consider all the following factors EXCEPT

Spencer,age 18 and of sound mind,has the legal capacity to contract.