Question 1

Richard is an adult.He enters into a contract to sell sixteen-year-old Jane his car for $3,000.The next day Richard recieves an offer of $4,000 for his car from twenty-year-old Bill.Richard

Accepted Answer

Richard is an adult and Jane is a minor. Therefore, Richard can disaffirm his contract with Jane because he is an adult and contracts with adults take precedence over contracts with minors.

Question 2

Mariah promises to pay her assistant Nadine $10,000 in consideration of the ser-vices she provided over the years.Mariah never pays Nadine.Mariah is

Accepted Answer

Mariah is not liable because the consideration was for past services, and past consideration is not valid consideration in contract law.

Question 3

Fact Pattern 10-1 
Sally contracts with Tasty Pizza Company to deliver its products.Both parties change their minds,however,and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 10-1.The next day,Sally changes her mind and again offers to deliver Tasty's products.Tasty is willing to deal,but for a new price.Sally and Tasty

Accepted Answer

Since both parties have already cancelled the original contract, they are free to enter into a new contract with a new price if they both agree to it. There is no obligation to perform the original contract since both parties have agreed to cancel it. So, Sally and Tasty may agree to a new contract that includes a new price.

Question 4

Fact Pattern 10-1 
Sally contracts with Tasty Pizza Company to deliver its products.Both parties change their minds,however,and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 10-1.Sally and Tasty

Accepted Answer

Both parties can rescind their contract only to the extent that it is executory, meaning the part of the contract that has not been performed yet. Any completed performance or delivery cannot be rescinded.

Question 5

Olivia,a minor,signs a contract to buy a bike from Phil,the owner of SuperCycles Bike Store.Olivia's right to disaffirm the contract

Accepted Answer

In most jurisdictions, a minor can disaffirm a contract, but the adult party (Phil) is still bound by the contract unless the minor chooses to disaffirm it.

Question 6

The state of Illinois enacts a usury statute.The purpose is to

Accepted Answer

The purpose of a usury statute is to establish a maximum rate of interest that may be charged for loans, in order to protect borrowers from being charged excessively high interest rates.

Question 7

Katie buys a car when she is seventeen.When she is twenty-five,Katie tries to disaffirm the contract and recover all her car payments.A court will likely find that the contract was

Accepted Answer

When Katie continued to make payments after reaching the age of majority (18), she effectively ratified the contract, making it binding and preventing her from disaffirming it to recover payments.

Question 8

Beth is a minor.She buys a set of sessions with a personal trainer,and a water bottle and some weights from a fitness store.Later,Beth decides that she does not want the water bottle or weights.In most states,Beth

Accepted Answer

The answer of Beth is a minor.She buys a set...

Question 9

Eli,a minor,buys an automobile insurance policy from Faithful Insurance Company and pays a $1,000 pre-mi-um.If Eli can disaffirm the contract,he can most likely recover

Accepted Answer

If Eli disaffirms the contract, he can recover the entire premium of $1,000. As a minor, he has the power to disaffirm the contract and void it from the beginning. Therefore, he is entitled to recover the full amount of consideration paid by him.

Question 10

Ruthie,a minor,charges the cost of an expensive leather jacket at a Girl's Trend store.Two nights later,Ruthie loses the jacket at Minors Only Club.She disaf-firms the jacket's purchase.Ruthie owes Girl's Trend the reasonable value of the jacket

Accepted Answer

A minor is generally not bound by contracts, but they are liable for the reasonable value of "necessaries" provided to them. If the jacket is deemed a necessary, Ruthie would owe the reasonable value.

Question 11

Franzea is injured in an accident caused by Gentry.Gentry agrees to pay Franzea $2,500 if she agrees to release him from further liability.She agrees.If Franzea's damages ultimately exceed $2,500,she can collect

Accepted Answer

When Franzea agreed to release Gentry from further liability in exchange for $2,500, she effectively waived her right to pursue any additional compensation, even if her damages exceed that amount.

Question 12

Chris,a minor,signs a contract to purchase alcoholic beverages for Dine & Drink,his parents' restaurant. The contract is

Accepted Answer

The contract is void as a matter of law because it involves the purchase of alcoholic beverages by a minor, which is illegal.

Question 13

Genovese Contracting,Inc.,agrees to build a warehouse for Hawthorne Distributors.Genovese runs into the types of difficulties that contrac-tors ordinarily confront,and Hawthorne agrees to pay extra compensation to over-come them. Regarding the agreement to pay more,a court would likely

Accepted Answer

The court would likely not enforce the agreement to pay more because the difficulties encountered are ordinary and expected in the course of construction, and thus do not constitute a valid reason for modifying the contract without additional consideration.

Question 14

At age seventeen,Daryl enters into a contract to buy a dozen movies from eHD TV Stream,Inc.,an online video service.Soon after reaching the age of ma-jority,Daryl attempts to disaffirm the contract.eHD files a suit against him.The court will most likely consider the contract ratified if it is

Accepted Answer

If the contract is executed, meaning Daryl has already received and used the movies, the court may consider the contract ratified since he did not disaffirm it upon reaching the age of majority.

Question 15

Gaye,a minor,signs a contract to buy a motorcycle from Hi-Valu Cycles by mis-representing her age as twenty-one.Gaye fails to make the pay-ments.Hi-Valu sues.Ordinarily,Gaye can

Accepted Answer

A minor can disaffirm a contract and return the goods to avoid further liability, even if they misrepresented their age.

Question 16

Colleen is intoxicated,but still mentally capable of understanding the consequences of her actions when she signs a contract to sell the rights to her latest phone app design to Addie.The contract is

Accepted Answer

A contract entered into by an intoxicated person is generally voidable, meaning the intoxicated person can choose to disaffirm the contract. However, if the person was still mentally capable of understanding the consequences of their actions, the contract is enforceable even if they attempt to disaffirm it. Therefore, the contract signed by Colleen while intoxicated but mentally capable of understanding the consequences of her actions would be enforceable even if she attempts to disaffirm it.

Question 17

Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college.Dave's uncle's promise is

Accepted Answer

Dave's uncle's promise is illusory because it is based on Dave's subjective belief that he deserves the money, which could be interpreted in different ways and cannot be objectively measured or verified. This lack of objective criteria makes the promise too vague and uncertain to be enforceable as a contract.

Question 18

Lucy,a minor,disaffirms a contract for necessaries without returning the goods.To Manny's Food Mart,the seller,Lucy is required to pay

Accepted Answer

When a minor disaffirms a contract for necessaries, they are still obligated to pay the reasonable value of the goods received. In this case, Lucy did not return the goods, so Manny's Food Mart is entitled to payment for the reasonable value of the goods. They cannot, however, require her to pay the sales price or ultimate worth of the goods if they are greater than the reasonable value.

Question 19

After an accident with a driver for Onyx Security Company,Paul signs a covenant not to sue Onyx for damages in a tort action if it pays for the damage to his car. This covenant

Accepted Answer

A covenant not to sue is an agreement where one party promises not to bring a legal claim against another party. In this case, Paul has agreed not to sue Onyx for damages in exchange for Onyx paying for the damage to his car. This covenant is enforceable and will bar recovery only if Onyx pays.

Question 20

Carly is a minor.Without her parents' knowledge,she signs a contract to buy an airplane ticket to Hawaii for spring break. Carly's parents are

Accepted Answer

Minors are typically not bound by contracts they sign because they are not yet considered adults and do not have the legal capacity to enter into agreements. Therefore, Carly's parents are not liable for the contract she signed without their knowledge.

Quiz 10: Consideration, capacity, and Legality