Deck 10: Capacity of the Parties

Question 1

Which of the following types of contract will NOT be enforceable against a minor?

A)Trading contracts.
B)Where the minor pays cash for goods or services.
C)Contracts for necessaries.
D)Beneficial contracts of service.

Answer 1

A

Question 2

The case of Steinberg v Scala (Leeds)Ltd [1923] 2 Ch 452 is an example of the principle that:

A)money paid under a voidable contract is not recoverable unless there has been a total failure of consideration.
B)if no price has been agreed a minor is obliged only to pay a reasonable price.
C)a minor must repudiate a contract within a reasonable time after becoming an adult.
D)none of the above.

Answer 2

A

Question 3

If the court decides that the goods are necessaries,the infant only has to pay a 'fair and reasonable' price for them.

Answer 3

True

Question 4

Which of the following is LEAST likely to be considered a 'necessary' for a 17-year-old unemployed university student?

A)A meal at a university refectory.
B)A 6-month lease of a flat near the university.
C)A business shirt from a department store.
D)A laptop computer.

Question 5

An individual under the age of 18 years is considered an infant.

Question 6

Where voidable contracts with infants are concerned,the infant can only recover money they have paid to the other party if they can establish that there has been a total failure of consideration.

Question 7

Why was the plaintiff unsuccessful in obtaining payment in Bojczuk v Gregorcewicz [1961] SASR 128?

A)A loan is a commercial transaction.
B)The loan was a benefit but not a necessary.
C)The loan was a necessary.
D)The defendant already had a good job.

Question 8

The onus of proof is on the plaintiff to establish that the goods or services provided to the infant are capable of being necessaries.

Question 9

In Steinberg v Scala (Leeds)Ltd [1923] 2 Ch 452,the infant:

A)was able to rescind the contract and recover the money.
B)was not able to rescind the contract.
C)was able to rescind the contract but could not recover the money.
D)could recover all the money she had paid for the shares.

Question 10

Which case is authority for the principle that a trading contract will not be enforceable against a minor,even if the terms of the contract are beneficial?

A)Steinberg v Scala (Leeds)Ltd [1923] 2 Ch 452.
B)Mercantile Union Guarantee Corp Ltd v Ball [1973] 2 KB 498.
C)Bojczuk v Gregorcewicz [1961] SASR 128.
D)Scarborough v Sturzaker (1905)1 Tas LR 117.

Question 11

Contracting with an infant renders the contract void in all circumstances.

Question 12

In which case did the court decide that an agency agreement entered into by a minor was a necessary?

A)Mercantile Union Guarantee Corp Ltd v Ball [1973] 2 KB 498.
B)Bojczuk v Gregorcewicz [1961] SASR 128.
C)Steinberg v Scala (Leeds)Ltd [1923] 2 Ch 452.
D)McLaughlin v Darcy (1918)18 SR (NSW)585.

Question 13

A contract with a minor in which the minor has a right to repudiate is called:

A)a good contract.
B)a void contract.
C)a valid contract.
D)a voidable contract.

Question 14

Out of the following groups,who are NOT presumed to have limited contractual capacity?

A)Mentally ill people.
B)Very young people.
C)Intoxicated people.
D)Very old people.

Question 15

Which of the following is NOT relevant to the validity of a beneficial contract of service with a minor?

A)The whole of the terms of the contract.
B)Whether the balance is in the minor's favour.
C)The nature of the employment.
D)Any harsh or onerous terms.

Question 16

A contract with a minor which has no legal effect on either party is called:

A)a voidable contract.
B)a void contract.
C)a good contract.
D)a valid contract.

Question 17

A corporation is classified as an artificially created legal person with limited contractual capacity.

Question 18

For a beneficial contract of service to be valid,the benefits should outweigh any harsh conditions.

Question 19

Do all persons,natural and legal,have full contractual capacity to enter into contracts?

Question 20

A contract with a minor which is enforceable and binding on both parties is called:

A)a voidable contract.
B)a void contract.
C)a good contract.
D)a valid contract.

Question 21

A bankrupt person cannot enter into contracts.

Question 22

The impact of the NSW Minors (Property and Contracts)Act 1970 was to:

A)modify the common law.
B)replace the common law.
C)never make minors liable in contract.
D)make minors liable in contract only if their parents agreed.

Question 23

How do the courts determine whether goods or services purchased by an infant will result in a valid and enforceable contract?

Question 24

A valid transaction allows the minor to repudiate the contract.

Question 25

In respect to beneficial contracts of service for infants in respect to all forms of training and employment,what factors do the courts take into account?

Question 26

What is the court's rationale for being reluctant to enforce a contract against a person under the age of 18 years? Do you agree with this rationale? Why or why not?

Question 27

Under the NSW Act,which of the following factors is NOT important when considering what is for the minors benefit?

A)The type of transaction.
B)The fairness of the bargain.
C)How the minor pays for their good or service.
D)The age of the infant.

Question 28

The common law rules governing minors and contracts were replaced by the Minors Contracts (Miscellaneous Provisions)Act 1979 SA.

Question 29

The NSW Act makes infants liable in contract if:

A)it is for the minor's benefit.
B)it satisfies the definition of a 'civil act.'
C)the minor is old enough to understand it.
D)all of the above.

Question 30

The beneficiaries in O'Connor v Hart [1985] 1 NZLR 159 were unable to have the contract set aside because:

A)The beneficiaries were not mentally unsound.
B)The beneficiaries were not aware that the farmer was mentally unsound.
C)The beneficiaries could not establish that Hart was mentally unsound and that the other party was aware or should have been aware of this.
D)None of the above.

Question 31

A person wishing to repudiate a contract for intoxication must do so within a reasonable time.

Question 32

A contract becomes voidable if a contracting party becomes mentally ill after entering into the contract.

Question 33

In Blomley v Ryan (1956)99 CLR 362:

A)The court held that it would be unfair to enforce the contract against the farmer.
B)The court granted an order for specific performance against the farmer.
C)The court held that the farmer although drunk,still understood what he was doing and therefore the contract was valid.
D)The court held that the farmer was so drunk that his judgment was affected and this was known to Blomley.

Question 34

In what circumstances will a person be able to repudiate a contract entered into while intoxicated?

A)The other party knew or should have known that the person was so intoxicated that they were incapable of understanding the nature of the contract.
B)The person was so intoxicated that they were incapable of understanding the nature of the contract.
C)The contract is not one for necessaries.
D)All of the above.

Question 35

Corporate contracts are enforceable:

A)Against the corporation as an artificial person.
B)Against the shareholders of the corporation.
C)Only if the contract is consistent with the corporation's constitution.
D)Against the directors of the corporation.

Question 36

How does the law prevent a minor taking advantage of the laws relating to the contractual capacity of minors?