Business Law Quiz 5 Study Guide

Business Law Quiz 5 Study Guide - PART I ESSAY 50 POINTS 50...

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PART I – ESSAY – 50 POINTS 50 year old Ana Jackson has recently been diagnosed with bipolar disorder. At certain times of the year she becomes depressive, and during other months she behaves manically and makes decisions hastily. She’s also been experiencing negative side-effects to her new medication, and the courts have temporarily declared her mentally incompetent. During this time, Ana receives a letter from the American Red Cross asking for a donation of any amount to assist in humanitarian efforts, and she pledges to give $400,000 from her savings. The Red Cross, pleased with Ana’s donation, sends her a thank you card that states that with her donation, they will build the Ana Jackson children’s clinic. Feeling depressed, Ana changes her mind and contacts the Red Cross to cancel the transaction and receive her money back. The Red Cross refuses and sues to enforce the pledge. Who wins and why? DECISION: RED CROSS V. JACKSON (circle the winner) RULE(S) OF LAW: (the law concerning the legal area of the dispute) A contract is a consensual transaction, and the parties to a valid contract must have a certain level of mental capacity. If a person is appointed a guardian by court order to control and preserve her property due to an impaired capacity, her contracts are void and of no legal effect. Similarly, if a person is declared incompetent, agreements made after the declaration are void. A person is deemed mentally incompetent through a cognitive ability test which determines if the party is unable to comprehend the subject or
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Business Law Quiz 5 Study Guide - PART I ESSAY 50 POINTS 50...

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