Question 1

The purpose of the right to disaffirm a contract is to

Accepted Answer

The purpose of the right to disaffirm a contract is to protect minors. The law recognizes that minors may not have the maturity or capacity to fully understand the consequences of their actions, and therefore allows them to cancel or void a contract they entered into while still a minor. This protects them from being held to agreements that they may not have fully understood or that may not have been in their best interests.

Question 2

Ben, a minor, signs a contract to buy a Call-U phone from Dallas, an adult sales representative. Dallas

Accepted Answer

A contract with a minor is generally voidable at the minor's discretion, not the adult's. Therefore, Dallas cannot avoid the contract unilaterally.

Question 3

Darien, a minor, wants to disaffirm a contract that he entered into with Echo, a cell service company. The law in Darien's state, as in all states, permits minors to disaffirm

Accepted Answer

The law in all states permits minors to disaffirm both executory and fully executed contracts.

Question 4

A contract to do something that is prohibited by statute is

Accepted Answer

A contract to do something that is prohibited by statute is considered illegal and against public policy, and is therefore unenforceable. It does not matter whether the parties are aware or ignorant of the prohibition, or whether the contract has a negative effect on society.

Question 5

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

Accepted Answer

For a contract to be enforceable, both parties must have the capacity to enter into the agreement. Capacity refers to the mental ability to understand the consequences of the contract. Intoxication can impair capacity, but if the intoxicated party still understands the legal consequences of the contract, it may still be enforceable. Therefore, choice D is the best answer as it reflects that Efron understood the legal consequences.

Question 6

Intoxicated, Hank enters a contract for the sale of ten acres of timberland to Ira for less than its market value. Later, Hank seeks to cancel the deal. In determining whether Hank can avoid his duties under the contract, a court is most likely to look at

Accepted Answer

The court will most likely consider both Hank's intoxicated mental state and other factors to determine whether he can avoid his duties under the contract. Intoxication can sometimes be a valid defense to avoid a contract, but only if it rendered the person incapable of understanding the nature and consequences of the contract. However, the court will also consider other factors such as whether Ira knew or should have known that Hank was intoxicated and whether there was any fraud or coercion involved in the contract. Therefore, both Hank's mental state and other factors will be relevant in determining whether he can avoid the contract.

Question 7

Donald is a minor. He can enter into any contract an adult can, provided

Accepted Answer

Minors have limited capacity to enter into contracts, and there are certain types of contracts that are prohibited by law for minors. Therefore, the only option that is correct is C. Options A and D are incorrect because they suggest that an adult's willingness to enter into a contract with a minor, or their willingness to ratify such a contract, impacts the minor's ability to enter into the contract. Option B is incorrect because it suggests that a minor's willingness to disaffirm a contract is a prerequisite to entering into the contract, which is not the case.

Question 8

Jack enters into a contract with Kris, an unlicensed contractor. This contract may be enforceable if

Accepted Answer

If the statute does not expressly affirm the barring of a contract's enforceability, then the contract between Jack and Kris may still be enforceable, even though Kris is an unlicensed contractor. However, there may be limitations on the scope of the contract or damages that Jack can recover, depending on the specific statute and jurisdiction involved.

Question 9

Van, a minor, wants to return a set of skis that he bought from Winter Sports. He used-and wrecked-the skis. In a state in which a duty of restitution is imposed, Van most likely

Accepted Answer

The duty of restitution in this state means that Van must return the skis, even though they are wrecked. He also has to pay for the damage he caused, as he is still responsible for his actions despite being a minor. Option A is incorrect because Van cannot return the skis "as is" as they are damaged. Option B is wrong as well because being a minor does not absolve him of his obligations to perform under the contract. Option D is incorrect since there is no requirement that the skis be returned fully restored.

Question 10

Quint enters into a contract to buy a quarter horse from Rancho Mirage. Quint can disaffirm the contract

Accepted Answer

Under common law, minors have the right to disaffirm or cancel a contract. This can be done either by words or conduct, such as returning the subject matter of the contract. Therefore, both options are available for Quint to disaffirm the contract.

Question 11

Horse racing, video poker games, and charity-sponsored bingo are

Accepted Answer

Horse racing, video poker games, and charity-sponsored bingo are all forms of gambling that are allowed and regulated by many states. Some states may have certain restrictions or regulations specific to each type of gambling, but they are generally legal with proper licensing and regulation.

Question 12

Sam is mentally incompetent but has not been adjudged by a court to be incompetent. Sam enters into a contract with Tony for the cleaning and maintenance of Uptown Office building. Most likely, the contract is

Accepted Answer

Since Sam is mentally incompetent, he is not capable of understanding the consequences of the contract that he is entering into. Therefore, the contract is voidable at the option of Sam, or his legal representative. The fact that Tony did not know about Sam's mental incompetence does not make the contract enforceable. The ownership of the building is also irrelevant in this case.

Question 13

Intoxicated, Odell enters a contract for the sale of her business, Precision Machining, to Quentin for less than its market value. This contract is voidable if, at the time,

Accepted Answer

If Quentin fraudulently induced Odell to become intoxicated, the contract is voidable because it involves misconduct that affects Odell's ability to consent.

Question 14

Cathy agrees to sell her Daily Donut shop to Ernie. In the agreement, there is a covenant not to compete that prohibits Cathy from operating a donut shop within a certain distance. If the restriction is unreasonable, a court will most likely

Accepted Answer

If the covenant not to compete is determined to be unreasonable, a court will typically reform or modify the covenant to make it reasonable rather than invalidate it completely. This allows the parties to still have some level of protection without being overly restrictive.

Question 15

Lee, a minor, enters into a contract to buy a dirt bike from Motor Bikes & Cycles. Lee can ordinarily disaffirm the contract

Accepted Answer

A minor has the right to disaffirm a contract, which means they can void the contract and make it as if it never existed. This can be done in a timely manner, or for a reasonable time after coming of age. Therefore, options A, B, and C are all correct.

Question 16

Floyd, a minor, misrepresents his age when entering into a contract to buy a car from Gas Hogs Inc. Floyd takes possession of the car, but makes no payments on the contract and tries to disaffirm it. Most likely, Gas Hogs can recover

Accepted Answer

While Floyd may have misrepresented his age, he still entered into a contract with Gas Hogs and took possession of the car. Therefore, Gas Hogs can recover the balance due on the contract as it was a valid agreement.

Question 17

In determining procedural unconscionability, a court is most likely to consider whether

Accepted Answer

The answer of In determining procedural unconscionability, a court is...

Question 18

Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely

Accepted Answer

The answer of Reed agrees to sell his Sports Equipment...

Question 19

Gretchen is adjudged by a court to be mentally incompetent. Gretchen

Accepted Answer

A mentally incompetent person lacks contractual capacity, which means that they cannot form a legally binding contract with another party. Therefore, option C is the correct answer. Option A and B are incorrect as a mentally incompetent person cannot enter into a valid contract. Additionally, option D is incorrect as a mentally incompetent person is presumed to lack contractual capacity.

Question 20

Accepting and giving legal force to an obligation that previously was not enforceable is

Accepted Answer

Ratification is the act of giving legal force to an obligation that previously was not enforceable, typically because one or more parties were not legally able to enter into the agreement. Disaffirmance is the act of rejecting or voiding a previously agreed-upon obligation. Emancipation refers to the legal process of freeing a minor from the control of their parents or guardians. Illegal refers to activities that are prohibited by law.

Quiz 13: Capacity and Legality