BLAW Final - Chapter 14

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Kris, age 17, who looks 18 or older, makes a contract to buy a car from Maisie, who is the age of majority. Maisie finds out Kris's age. Maisie may avoid the contract even if Kris did not misrepresent his age.

False

Sally goes away to college at 17, lives on her own, and pays her own rent and electric bills. If she makes a contract to buy a television set, in most jurisdictions, she may assert her minority status and set aside the contract.

True

Beth, at age 17, sells an antique pin she inherited. Even if the buyer resells the pin to someone who did not know that it was purchased from a minor, Beth can recover the pin from the third person if she changes her mind about wanting to sell it.

False

Seventeen-year-old Teresa wants to disaffirm her student loan agreements. Most states will not allow her to avoid such contracts.

True

In a contract to sell necessaries to a minor, these goods and services are limited to medical care, food, and shelter.

False

If Carrie, age 14, contracted to buy a fur coat by mail, the coat manufacturer would not have to send it since the contract was void.

False

Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority.

False

In general, if a minor lies about her age in order to induce the seller to contract with her, she cannot disaffirm that contract.

False

In general, a contract made by a mentally incompetent person is void when no guardian has been appointed.

False

The doctrine of necessaries applies in the same way to minors and mental incompetents.

True

If a person is adjudicated insane and placed in care of a guardian, that person's contracts are void.

True

Sean had two beers and felt tipsy. He made a deal with Yoko to buy her stereo. He can avoid the contract because of lack of capacity.

False

By the majority view, a minor need only return any property he has received from the other party if the minor wishes to disaffirm the contract. He has no duty to return the property in the same condition in which he received it.

True

In general, a minor may only disaffirm a contract after he has reached the age of majority.

False

All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract.

False

In general, minors have liability for their torts.

True

A person under guardianship by court order has no contractual capacity.

True

At common law, a minor was a person who was under twenty-one years of age.

True

An intoxicated person must have been so intoxicated as to have been unable to understand the consequences of his actions or have been unable to act in a reasonable manner in order to avoid a contract.

True

Ratification makes a contract void from the beginning.

False

Disaffirmance may be express, but it may not be implied.

False

An automobile may be considered a necessary item for a minor.

True

Ratification need not be express; it may be implied from the minor's conduct.

True

In some states, minors are liable for contracts involving bank accounts and student loans and cannot avoid these contracts even though they can avoid other types of contracts.

True

Emancipated minors have no ability to avoid contracts based upon their minority.

False

Michael, a minor, rents a car to attend the senior prom at his high school. He signs an agreement stating that he will not take the car more than 100 miles from the rental agency. At 2:00 a.m., after he has had a few beers, his friends talk him into driving 200 miles to Chicago for the weekend. On the way, the car is involved in a minor traffic accident that damages the vehicle. Because the tort of negligence is related to the rental contract for the vehicle, Michael has no liability to the rental agency.

False

Darrell goes to lunch with an office equipment salesman. After drinking two beers and eating a Reuben sandwich, Darrell signs a contract to purchase a $1200 machine for the office. Two hours later, he has second thoughts and decides a different machine might be a better buy, so he calls the salesman and wants to disaffirm the contract based upon intoxication. Darrell can avoid the contract on this basis.

False

Intoxicated persons are liable in quasi contract for necessaries purchased during their incapacity.

True

All furniture, television sets, and appliances purchased by a minor for her apartment would be considered necessaries.

False

John is 17 years old and earns extra money by repairing cars. Nathan, who is 21, brings his car to John for repairs, and John ruins the brake system of the car, because of his inexperience. If Nathan sues John for negligence in performing the auto repair contract, in most states John will have no liability, because the tort of negligence and the auto repair contract are connected.

True

If a person is unable to understand the nature and effect of entering into a contract, he or she can avoid it.

True

An incompetent person who lacks understanding of a contract and its consequences can avoid it even if the other party had no reason to know of the incompetent's mental condition.

True

A mental condition that impairs a person's ability to act in a reasonable manner is one type of mental incompetence.

True

Courts treat contracts of incompetents and intoxicated persons essentially the same, except they are stricter with intoxicated persons because of intoxication's voluntary nature.

True

A person taking a prescription medication will be treated the same as an incompetent under the cognitive ability test.

True

A minor can ratify part of a contract and disaffirm another part of it.

False

Ratification of a contract, once effected, is final and cannot be withdrawn.

True

Persons who lack mental capacity at the time they enter into a contract may avoid liability under the agreement.

True

Lydia makes a contract to purchase a used car on her seventeenth birthday. Six months later, her ratification of the contract can be effectively implied by her continuing payments.

False

A mental illness or defect of one of the parties to a contract automatically makes a contract void.

False

Anna is 88 years old and under the legal guardianship of her daughter. One day Anna receives a telephone call from a health insurance salesman and purchases a $400-a-month Medigap insurance policy.

This contract is void.

Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold them to Sharon and disaffirmed the contract. What result?

Fay is still liable because selling the skis amounts to a ratification.

Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Facial Glo Company. She had used up all the eye shadows, lipsticks, and powders. The general rule is that she may:

disaffirm, but she has to return the makeup that is not used up.

Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark's father liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark's father have to return the briefcase to her?

No, if Mark's father bought it without knowing that Mary was a minor.

Ratification can occur in which of the following ways?

Through express language, As implied from conduct, Through failure to make a timely disaffirmance

Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct?

Violet may not disaffirm the contract.

Todd, a minor, rents an automobile from Rosa, an adult. Todd damages the vehicle when he negligently backs into a pole. Under the majority view, can Rosa recover damages from Todd?

No, his contractual immunity protects him from legal action by Rosa.

Steve purchases a four-wheel drive truck from Belk Auto Sales. Steve is only 17 years of age. He wrecks the vehicle and attempts to disaffirm the contract and have Belk repay him all that he has paid. In the majority of jurisdictions, what would happen?

Steve may simply return the vehicle and get his money.

Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation?

Randy may not recover the vehicle from Mr. Smith.

Robert is 17 years old. He lies to Bouyers Auto in order to induce it to sell him a new pickup. Bouyers falls for this lie and sells him the pickup. In most jurisdictions, which of the following is correct?

Robert may disaffirm and get his money back.

Which of the following is not true regarding the contracts of incompetent persons?

Unlike a minor, an incompetent person can never ratify a contract.

Which of the following is not true regarding the contracts of intoxicated persons?

Slight intoxication will destroy one's contractual capacity.

The exercise of the power to avoid a contract is known as:

disaffirmance.

Sixteen-year-old Laura's disaffirmance of a contract:

for a sale of land by her is not effective until after she reaches the age of majority.

Which of the following is least likely to be classified as a necessary for which a minor will be held liable on a contract?

A camera

In which of the following situations would a minor be unable to disaffirm a contract which he had made?

Where the minor wishes to affirm part of a contract and disaffirm another part of the same contract

Which of the following would be a valid ratification?

Two weeks after his eighteenth birthday, Jerry sells the motorcycle he contracted to buy when he was seventeen, Two weeks after attaining his eighteenth birthday, Jerry calls the bank to assure them that he will continue making payments on the loan agreement he signed a month before his eighteenth birthday, Two weeks after his eighteenth birthday, Jerry makes a payment on the installment contract he signed a month before. (all)

Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then:

Percy may keep the mobile home but is only liable for the reasonable value of the mobile home.

Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive and now wishes to cancel the order.

Cheryl may disaffirm this executory contract.

Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda wishes to ratify this contract, Wanda:

must reach the age of majority and ratify the contract as a whole.

Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the computer next week.

Donald has expressly ratified the contract.

A contract by which of the following is void?

A thirty-six-year-old man under a court-ordered guardianship for mental incompetency.

When a minor falsely advises the other party that he is of the age of majority and based upon that misrepresentation, the other party in good faith enters into a contract with the minor:

There is no uniform rule. States differ, and depending upon the state, any of the above could be correct.

Which of the following is correct regarding the contractual liability of incompetent persons?

For executed, fair contracts with a mentally incompetent person who understands but cannot control his behavior to act rationally, the incompetent must restore the competent party to the status quo before the transaction by a return of the consideration received or its equivalent in money.

In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:

the facts and circumstances of the case.

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