Question 1

Parents are not liable for the contracts made by their minor children when the children are acting on their own.

Accepted Answer

A) True 
 B)False

Question 2

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

A)   Odell's intoxication was purely voluntary.
B)   Quentin fraudulently induced Odell to become intoxicated.
C)   Quentin was also intoxicated.
D)   Odell understood the legal consequences.E) All of the above
F) A) and B)

Question 3

A minor can ordinarily disaffirm a contract at any time during minority but not after coming of age.

Accepted Answer

A) True 
 B)False

Question 4

For a minor to disaffirm a contract, he or she must present the contract to a court.

Accepted Answer

A) True 
 B)False

Question 5

Contractual capacity is the legal ability to enter into a contract.

Accepted Answer

A) True 
 B)False

Question 6

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

Accepted Answer

A) True 
 B)False

Question 7

An intoxicated person is liable for the reasonable value of any necessaries he or she receives.

Accepted Answer

A) True 
 B)False

Question 8

A minor who disaffirms a contract for necessaries is no longer liable for the reasonable value of the goods.

Accepted Answer

A) True 
 B)False

Question 9

Restitution is the legal avoidance, or setting aside, of a contractual obligation.

Accepted Answer

A) True 
 B)False  False

Question 10

Steve relinquishes the right to his son Tanner's control, care, custody, and earnings. This act is

Accepted Answer

A)   disaffirmance.
B)   emancipation.
C)   ratification.
D)   illegal.E) B) and C)
F) C) and D)

Question 11

Emma, a minor, seeks and engages in employment for Farmland Foods in the manner of an adult. In many states, the employment contract between Emma and Farmland would be

Accepted Answer

A)   entirely unenforceable.
B)   fully enforceable.
C)   readily voidable.
D)   totally void.E) A) and B)
F) C) and D)

Question 12

Cary, a minor, returns a digital music player that he bought from Discount City, which refunds the price. This exchange involves

Accepted Answer

A)   emancipation.
B)   ratification.
C)   restitution.
D)   misrepresentation.E) None of the above
F) C) and D)

Question 13

Ruth, a minor, enters into a contract to work for Sales Call Center by misrepresenting her age to be twenty-one. In most states, Ruth can

Accepted Answer

A)   avoid liability under the contract.
B)   refuse to perform any obligation under the contract.
C)   disaffirm the contract.
D)   all of the choices.E) A) and B)
F) A) and C)

Question 14

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 attempts to disaffirm it. In a growing number of states, Gas Hogs can recover

Accepted Answer

A)   an amount equal to the wholesale value of the car.
B)   the car, but not any of the balance due on the contract.
C)   the balance due on the contract.
D)   nothing.E) A) and B)
F) None of the above

Question 15

Rosa, a seventeen-year-old, signs a contract to sell her car to Stan. Later, Rosa decides not to sell the car. Rosa is liable to Stan for

Accepted Answer

A)   the cost of a car of comparable value.
B)   the value of her performance under the contract.
C)   the amount of the buyer's profit on the deal.
D)   nothing.E) A) and B)
F) A) and C) D

Question 16

Contracts entered into by mentally incompetent persons may be disaffirmed.

Accepted Answer

A) True 
 B)False  True

Question 17

A party may have the capacity to enter into a valid contract but also have the right to avoid liability under it.

Accepted Answer

A) True 
 B)False

Question 18

Businesses do not ordinarily require parents to sign any contract made with a minor.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   can enter into a valid contract and cannot avoid liability under it.
B)   can enter into a valid contract but has the right to avoid liability under it.
C)   cannot form a legally binding contract with another party.
D)   is presumed to have contractual capacity.E) B) and C)
F) A) and C)

Question 20

If a person has been adjudged mentally incompetent by a court, any contract made by the party is void.

Accepted Answer

A) True 
 B)False

Exam 11: Capacity

Parents are not liable for the contracts made by their minor children when the children are acting on their own.

Correct AnswerverifiedShow Answer

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,

Correct AnswerverifiedShow Answer

A minor can ordinarily disaffirm a contract at any time during minority but not after coming of age.

Correct AnswerverifiedShow Answer

For a minor to disaffirm a contract, he or she must present the contract to a court.

Correct AnswerverifiedShow Answer

Contractual capacity is the legal ability to enter into a contract.

Correct AnswerverifiedShow Answer

If a person was sufficiently intoxicated to lack mental capacity, his or her contracts are void.

Correct AnswerverifiedShow Answer

An intoxicated person is liable for the reasonable value of any necessaries he or she receives.

Correct AnswerverifiedShow Answer

A minor who disaffirms a contract for necessaries is no longer liable for the reasonable value of the goods.

Correct AnswerverifiedShow Answer

Restitution is the legal avoidance, or setting aside, of a contractual obligation.

Correct AnswerverifiedFalse

Steve relinquishes the right to his son Tanner's control, care, custody, and earnings. This act is

Correct AnswerverifiedShow Answer

Emma, a minor, seeks and engages in employment for Farmland Foods in the manner of an adult. In many states, the employment contract between Emma and Farmland would be

Correct AnswerverifiedShow Answer

Cary, a minor, returns a digital music player that he bought from Discount City, which refunds the price. This exchange involves

Correct AnswerverifiedShow Answer

Ruth, a minor, enters into a contract to work for Sales Call Center by misrepresenting her age to be twenty-one. In most states, Ruth can

Correct AnswerverifiedShow Answer

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 attempts to disaffirm it. In a growing number of states, Gas Hogs can recover

Correct AnswerverifiedShow Answer

Rosa, a seventeen-year-old, signs a contract to sell her car to Stan. Later, Rosa decides not to sell the car. Rosa is liable to Stan for

Correct AnswerverifiedD

Contracts entered into by mentally incompetent persons may be disaffirmed.

Correct AnswerverifiedTrue

A party may have the capacity to enter into a valid contract but also have the right to avoid liability under it.

Correct AnswerverifiedShow Answer

Businesses do not ordinarily require parents to sign any contract made with a minor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a person has been adjudged mentally incompetent by a court, any contract made by the party is void.

Correct AnswerverifiedShow Answer

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False

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D

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True

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