Deck 7: Capacity to Contract

Question 1

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

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.

Answer 1

A

Question 2

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

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

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 5

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

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 6

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

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

Question 7

While many states have repealed their former laws restricting the capacity of a convict to contract, some states still have restrictions.

Question 8

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

Question 9

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

Question 10

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)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 11

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?

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 12

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

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 13

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

Question 14

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

Question 15

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.

Question 16

The term disaffirmation refers to:

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.