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Exam 14: Contractual Capacity

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Question 1

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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 the skis to Sharon and disaffirmed the contract.Fay is:

A) still liable since she had to disaffirm before her 18th birthday.
B) still liable because selling the skis amounted to a ratification.
C) still liable because she used the skis.
D) not liable because skis are not necessaries.

E) All of the above
F) None of the above

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Question 2

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Disaffirmance must be express; it may not be implied.

A) True
B) False

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Question 3

Multiple Choice

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In Berg v.Traylor,the court found that:

Mel is 17 years old but looks older than 18.He makes a contract to buy a car from Maisie,who is the age of majority.When Maisie finds out Mel's age,she may avoid the contract even if Mel did not misrepresent his age.

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.

The minority of states require that the minor,when effecting a disaffirmance of the contract,pay at least a reasonable amount for the use of the property or the amount by which the property depreciated while in the hands of a minor.

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

Cheryl is a 17-year-old high school student who was elected homecoming queen and does part-time modeling to earn money for college.She has an important interview with a modeling agency and wants to make a good impression,so she withdraws $5,000 from her savings and buys a designer outfit and a fur coat for the interview.A week later,she returns the coat to the department store and says she would like her money back.The store is reluctant to take the items.What are Cheryl's rights?

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

What are the two tests for mental competency?

Discuss a minor's duty to a seller upon disaffirmance of a contract for the sale of goods.

Ratification makes a contract void from the beginning.

Harold,a minor,decided to trade his 1992 truck on a new car at the local dealership.One week after driving the new car,Harold decides that he cannot afford the payments.Harold now wishes to disaffirm his purchase and get his old truck back.The dealer informs Harold that the truck has been sold.Can Harold get the old truck back and disaffirm his contract with the dealer?

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

Seventeen-year-old Teresa wants to disaffirm her student loan agreements.In most states,she will not be allowed to do so.

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

An automobile will never be considered be a necessary item for a minor.

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

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

Fourteen-year-old Marsha bought $120 worth of video games 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?