Deck 13: Capacity to Contract

Question 1

Emancipation gives a minor the capacity to contract.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

In a contract made by a minor:

A)adult parties to the contract can disaffirm.
B)the minor has the right to disaffirm.
C)his/her siblings who are also minors can disaffirm the contract on his/her behalf.
D)the minor can disaffirm the contract anytime even after attaining majority.

Answer 3

B
Explanation: The idea behind minors' incapacity is that a minor (a person who is not legally considered to be an adult)may not be able to bargain effectively with older,more experienced persons.The courts responded to this idea by making minors' contracts voidable -that is,the minor is given the right to disaffirm (cancel)his or her contracts.

Question 4

Minors are entitled to the return of their property given as consideration,even if that property is possessed by a third party at the time of disaffirmance.

Question 5

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

Question 6

Minors are generally held liable on a quasi contract basis for the reasonable value of necessaries furnished to them.

Question 7

When a minor reaches the age of majority,he/she:

A)may disaffirm a contract for a reasonable time after reaching majority.
B)can no longer be ratified.
C)must put his intent to disaffirm in writing shortly before reaching majority.
D)should renew his contract in order to disaffirm the contract legally.

Question 8

Minors' contracts are not voidable.

Question 9

A minor can disaffirm a contract made for ____.

A)real estate
B)life insurance
C)educational training
D)bank accounts

Question 10

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

Question 11

Which of the following is true for a contract made by a minor?

A)It is voidable.
B)It cannot be disaffirmed during minority.
C)It is barred from ratification.
D)A minor's capacity to contract is never presumed.

Question 12

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.

Question 13

Minors who successfully disaffirm a contract are not entitled to the return of any consideration they have given the adult party to the contract.

Question 14

Chuck Olson,aged 17,bought a used car from Bobby Duncan on September 15,2006,agreeing to pay Duncan $200 a month for 12 months.On October 6,2006,Olson was involved in an accident that damaged the car.On October 7,2006,Olson told Duncan he wanted to disaffirm the contract for the purchase of the car.Olson attained the age of majority on October 8,2006.If Duncan sues Olson,in most states he will:

A)win,because Olson did not disaffirm until after reaching the age of majority.
B)win,because Olson was unable to return the car.
C)lose,even though Olson cannot return the car.
D)lose,because Olson did not ratify the contract on the day he attained majority.

Question 15

Minors are liable for the value of necessaries they have purchased under a contract but have not received at the time they disaffirm.

Question 16

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

Question 17

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

Question 18

If the minors' contract involves title to real estate,the minor cannot disaffirm until reaching majority.

Question 19

If either party entering a contract lacks the capacity to contract,the contract is void or voidable.

Question 20

If a person is adjudicated insane,his/her personal representative cannot ratify the contract.

Question 21

What is the term used for the willingness of adults who indicate an intent to be bound by contracts entered while still minors?

A)Ratification
B)Disaffirmance
C)Emancipation
D)Forbearance

Question 22

Whether an item can be considered "necessary":

A)depends on the circumstances of the agreement.
B)depends on the minors' station in life.
C)doesn't depend on who provides for it.
D)doesn't depend on the minors' age.

Question 23

In which of the following ways do courts prevent minors,who misrepresent their age,from defrauding adults?

A)By requiring the minor to place the adult in status quo.
B)By holding the minor to his/her spoken statements which clearly indicate intent to be bound by the contract.
C)By ratifying the minor before he/she turns adult.
D)By proving them incapable of being held in a contract.

Question 24

Jessica,a minor,rented an apartment in Greenwich Village for $800 a month.She signed a one-year lease.After living there for three months,Jessica decided to move to another apartment complex.She is liable for the reasonable value of three months' rent at Greenwich Village,but not for the remaining nine months' rent.This is in accordance with the _____ provision of capacity to contract by minors.

A)disaffirmation
B)necessaries
C)emancipation
D)adjudication

Question 25

When a person has been adjudicated insane:

A)the court rules that the person is of unsound mind but has lucid moments.
B)most states hold that the contracts of such persons are voidable.
C)the court appoints a guardian or conservator for the person's estate.
D)the court says that such a person is liable for any value of necessaries.

Question 26

_____ is/are essential to a minor's continued existence and general welfare.

A)Considerations
B)Emancipation
C)Forbearance
D)Necessaries

Question 27

If a court later finds that a person lacked mental capacity at the time a contract was entered into,that contract is:

A)still valid.
B)voidable.
C)automatically void.
D)disaffirmed.

Question 28

Under the common law,minors:

A)are entitled to the return of their property given as consideration only upon attaining majority.
B)are entitled to the return of their property given as consideration even if they have been ratified.
C)are entitled to the return of their property given as consideration,even if that property is possessed by a third party at the time of disaffirmation.
D)are not entitled to the return of their property given as consideration.

Question 29

In most states,the agreements of people who have been adjudicated insane are ____.

A)valid
B)void
C)voidable
D)unenforceable

Question 30

Under which of the following circumstances can minors disaffirm a contract?

A)The minor has not ratified the contract upon reaching majority.
B)The contract is for real estate.
C)The minor has given a false statement about his/her age.
D)The minor is required to place the adult in status quo.

Question 31

Under which of the following situations can a person suffering from mental impairment have the legal capacity to contract?

A)If the contract is for necessaries provided by parents.
B)If the person is married.
C)If the person is intoxicated from drugs or alcohol,but is not mentally retarded.
D)If the person entered a binding contract during a lucid moment.

Question 32

"Status quo ante" means:

A)that minors can lose the right to disaffirm if they fraudulently misrepresent their age.
B)"the condition beforehand," or the position one would be in if a given contract had never come into existence.
C)"the state sets the ante," or that the basic risks of entering into contracts are not protected by the state.
D)that a minor is totally protected by law on all counts of misbehavior.

Question 33

A minor's contract for necessaries is:

A)unenforceable.
B)estoppable.
C)voidable.
D)binding on a quasi contract theory.

Question 34

Hans bought a stylish sports car when he was 15.Two weeks after he turned 18,he sold the car to his neighbor.In this scenario:

A)Hans may disaffirm the contract even after he sold the car.
B)Hans can disaffirm the contract as it was never a valid ownership.
C)Hans may recover the cost of the car from the dealer who sold it to him when he was 15.
D)Hans cannot disaffirm the contract because he sold the car.

Question 35

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

A)can reclaim the goods even from third parties.
B)can no longer reclaim those goods from innocent third parties.
C)have to return consideration even if the goods have been consumed.
D)have to return consideration even if it has been stolen from them.

Question 36

What is the term used to describe the termination of a parent's right to receive services and wages from a child and to generally control him?

A)Emancipation
B)Disaffirmation
C)Ratification
D)Incapacity

Question 37

People who regain their mental capacity:

A)can disaffirm for a reasonable time after regaining mental capacity.
B)can ratify their contracts.
C)are still considered to be insane for a reasonable period of time.
D)cannot ratify their contracts.

Question 38

A person lacking mental capacity must return the other party to status quo when:

A)the other party was aware of the person's lack of mental capacity.
B)the person lacking mental capacity has already enjoyed the product of the agreement.
C)the other party was unaware of the person's lack of mental capacity.
D)the person lacking mental capacity has passed on the product of agreement to someone else.

Question 39

_____ 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.

A)Emancipation
B)Adjudication
C)Incapacitation
D)Ratification

Question 40

According to the theory of incapacity,people are presumed to lack the capacity to contract if they are _____.

A)mentally ill
B)obese
C)felons
D)diabetic

Question 41

Explain the test for mental incapacity in contract law.

Question 42

Ratification of a contract which is voidable for lack of capacity:

A)must be in writing.
B)can occur at any time after the contract is made.
C)cuts off the right to disaffirm.
D)must always have at least two witnesses present at the time of contracting.

Question 43

Explain the limitations on a minor's right to disaffirm a contract.

Question 44

After staying home and raising four children,Quinn got a job at a museum.Ten years later,she realized her marriage was in trouble and began psychological counseling.She later separated from her husband but continued therapy.During a session at which her husband was present,he asked his wife,"What do you want?" She wrote on a piece of paper that she wanted the house,her car,the joint bank accounts,and a computer.The husband took the note to his attorney,who drafted a property settlement on its basis.Quinn,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?

Question 45

Why do the courts require minors to pay the reasonable value of necessaries they receive under a contract they are permitted to disaffirm?

Question 46

Dax,15,bought a diamond ring from a local jewelry store.The jeweler was aware of his age.He made a partial payment on the ring of $100.Ten months later,Dax's girlfriend broke off the engagement,but refused to return the ring.Dax asked the jeweler to repossess the ring,but the jeweler took no action.Dax sought to disaffirm the contract for the ring,and the jeweler argued that he could not do so without returning the ring.Can Dax disaffirm?

Question 47

People lacking mental capacity:

A)can disaffirm their contracts.
B)cannot disaffirm their contracts.
C)are liable for the reasonable value of necessaries.
D)don't need to return any consideration they have received.

Question 48

In cases involving contractual incapacity caused by insanity:

A)the contract is always void.
B)the contract is always estopped.
C)the rules regarding necessaries are basically the same as in the case of minors.
D)the rules state that the person must be accompanied by at least two witnesses at the time of contracting.

Question 49

Which of the following statements is true?

A)Minors who have lied about their age can disaffirm their contracts.
B)A comatosed person is regarded as legally having the capacity to contract.
C)For a person adjudicated insane,his/her personal representatives cannot ratify the contract.
D)People who regain their mental capacity can ratify their contracts.

Question 50

A contract is voidable due to:

A)lack of capacity because of felony.
B)adjudication of insanity.
C)ratification by minors.
D)lack of capacity because of minority.