Exam 13: Capacity to Contract

Courts prevent minors,who misrepresent their age,from defrauding adults,by:

Performing part of the contract after attaining majority,such as making payments or accepting some performance under the contract,is not enough evidence for ratification.

A person could be medically insane but still have the legal capacity to contract.

After staying home and raising four children,Mary got a job at a museum.Ten years later,she realized her marriage was in trouble and went for psychological counseling.She later separated from her husband but continued therapy.During a session at which her husband was present,he asked her,"What do you want?" She wrote on a piece of paper that she wanted the house,the car,the joint bank accounts,and a computer.The husband took the note to his attorney,who drafted a property settlement on its basis.Mary,ignoring the advice of her psychologist to hire her own attorney,signed the agreement.She later challenged the agreement on the grounds of incapacity.Will she succeed?

Emancipation usually gives a minor the capacity to contract.

Which of the following is true of necessaries in a minor's contract?

Under the Uniform Commercial Code,minors who disaffirm their contracts involving goods:

_____ means that a general hearing was held on the person's mental competency,and the court determined that the person was of unsound mind and appointed a guardian or conservator of the person's estate.

Many states treat intoxicated persons like people who lack mental capacity if,at the time they entered the agreement,they were so intoxicated that they were unable to understand the nature of the business at hand.

When a mentally impaired person regains his mental capacity,he can ratify a contract he made while he was impaired.

Which of the following is true of minors' ability to disaffirm?

Chuck Olson,aged 16,buys a used car from Bobby Duncan Used Cars Center on September 15,2006.Olson agrees to pay $200 a month for 12 months.A month after the purchase,Olson is involved in an accident that wrecks the car.He immediately calls Duncan Cars and informs them that he is disaffirming the contract.According to traditional common laws,which of the following is most likely to be true?

Capacity to contract is presumed and a party claiming incapacity bears the burden of proof.

The idea behind _____ is that adults who indicate an intent to be bound by contracts entered while still minors should be bound to those contracts and denied the right to disaffirm thereafter.

When a person has been adjudicated insane,_____.

Minors' contracts are not voidable.

In a contract made by a minor,_____.

Explain the test for mental incapacity in contract law.

In most states,the agreements of persons who have been adjudicated insane are void.

If either party entering a contract lacks the capacity to contract,the contract is void or voidable,depending on the kind of incapacity involved.