Question 1

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

Accepted Answer

A television would be classified as a luxury item rather than a necessary, so it is less likely that a minor would be held liable on a contract for this item. School supplies, clothing, and even an automobile (if necessary for transportation to work or school) could be classified as necessary items.

Question 2

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?

Accepted Answer

Since Randy is a minor, he does not have the legal capacity to enter into a contract to purchase a vehicle. Therefore, the sale to Steve is voidable at the option of Randy. However, once Steve conveys the vehicle to Arthur, who is a good faith purchaser for value without notice of Randy's lack of capacity, Randy cannot recover the vehicle from Arthur. The sale to Arthur is considered valid, and Randy's only recourse would be to hold Steve liable for any damages caused by the sale.

Question 3

Robert Briscoe is 17 years old.He lies to Bouyers Auto in order to induce them to sell him a new pickup truck.Bouyers falls for this lie and sells him the pickup.Under the prevailing view, which of the following is correct?

Accepted Answer

Under the prevailing view, a minor can disaffirm a contract and get their money back, even if they lied about their age.

Question 4

In the Zelnick v.Adams case, the Supreme Court of Virginia found:

Accepted Answer

The answer of In the Zelnick v.Adams case, the Supreme...

Question 5

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?

Accepted Answer

The answer of Mary, age 17, sold Mark, age 22,...

Question 6

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

Accepted Answer

Disaffirmance is the exercise of the power to avoid a contract. This power is usually granted to minors or people who lacked mental capacity at the time of entering into the contract. Ratification is the act of accepting or affirming a contract after initially having the power to avoid it. Ab initio means "from the beginning" and is not directly related to the power to avoid a contract. Restitution refers to the return of any property or compensation received during the contract period if the contract is avoided.

Question 7

Under the Uniform Commercial Code, when the minor has sold goods and the buyer has resold them to a good faith purchaser for value:

Accepted Answer

According to the Uniform Commercial Code, if a minor sells goods and the buyer resells them to a good faith purchaser for value, the good faith purchaser acquires valid legal title to the goods. The minor cannot disaffirm the sale and recover the property because the goods have been sold to a third party who has acted in good faith and paid value for the goods. Therefore, choice (C) is the best choice.

Question 8

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?

Accepted Answer

In most jurisdictions, a minor can disaffirm a contract and return the vehicle to receive a full refund, as contracts with minors are generally voidable.

Question 9

Which of the following is untrue regarding the contracts of incompetent persons?

Accepted Answer

Unlike a minor, an incompetent person can ratify a contract upon regaining competency, but only to the extent that he is capable of understanding the nature of the transaction.

Question 10

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

Accepted Answer

If the mobile home is considered a necessary, Percy can disaffirm the contract but still must pay the reasonable value of the mobile home. In this case, since the reasonable value of the mobile home is $10,000 (half of the purchase price), Percy can keep the mobile home but will only be liable for $10,000, not the full $20,000 he paid for it.

Question 11

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

Accepted Answer

The answer of In which of the following situations would...

Question 12

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?

Accepted Answer

Selling the skis to Sharon is considered a ratification of the contract, which means Fay affirmed the contract after reaching the age of majority, making her liable.

Question 13

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

Accepted Answer

Contracts involving minors are generally voidable at the option of the minor, not the adult. Therefore, Violet, being the adult, cannot disaffirm the contract; only Tim, the minor, has the legal right to do so.

Question 14

Which of the following is untrue regarding the contracts of intoxicated persons?

Accepted Answer

Slight intoxication will not necessarily destroy one's contractual capacity.

Question 15

Fourteen-year-old Marsha bought $120 worth of video games and DVDs at a local store, using her own money.Her parents insisted that she return the items and get her money back.Which of the following is true?

Accepted Answer

In many jurisdictions, minors have the right to disaffirm contracts, meaning they can void a contract and get their money back, even if they cannot return the merchandise, as a protection due to their age.

Question 16

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.The contract is:

Accepted Answer

Anna is under the legal guardianship of her daughter, which means she is not legally competent to enter into a contract. Therefore, the contract is void.

Question 17

Wanda at age 17 purchased an expensive sound system from Music World.If Wanda wishes to ratify this contract, Wanda:

Accepted Answer

A minor can only ratify a contract upon reaching the age of majority, and it must be ratified as a whole, not partially.

Question 18

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 she now wishes to cancel the order.Cheryl:

Accepted Answer

As Cheryl is a minor, she has the right to disaffirm this executory contract. While clothing is generally classified as a necessary, a new prom dress may not be considered a necessary. Therefore, Cheryl can cancel the order without any legal obligation to pay for the dress.

Question 19

Maureen is taking a prescribed medication which makes her drowsy and inattentive.Any contracts she makes:

Accepted Answer

Maureen's medication may impair her ability to comprehend the subject, nature, and consequences of any contracts she enters into. As a result, any contracts she makes would be considered voidable, meaning she would have the option to rescind the contracts. However, it is important to note that the contracts would only be voidable if Maureen was unable to comprehend them at the time she signed them. If she was still able to understand the terms and consequences of the agreements, they would be considered valid.

Question 20

Joanne, a minor, sold her laptop computer to Bruce, an adult.Bruce then sold the laptop to Anna, also an adult, who had no knowledge of the fact that the original owner was a minor.Under the Uniform Commercial Code, Joanne may:

Accepted Answer

The answer of Joanne, a minor, sold her laptop computer...

Quiz 14: Contractual Capacity