Mann_BLRB 9_TB_Ch14

Business Law and the Regulation of Business

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Chapter 14—Contractual Capacity TRUE/FALSE 1. Mel, age 17, who looks 18 or older, makes a contract to buy a car from Maisie, who is the age of ma- jority. Maisie finds out Mel's age. Maisie may avoid the contract even if Mel did not misrepresent his age. ANS: F MSC: AACSB Analytic 2. Sally goes away to college at 17, lives on her own and pays her own rent and electric bills. If she makes a contract to buy a television set, in most jurisdictions, she may assert her minority status and set aside the contract. ANS: T MSC: AACSB Analytic 3. Natalie, age 17, rented a power washer and while using the machine, she negligently damaged it bey- ond repair. Under the majority view, the rental company can successfully sue Natalie for damages on a tort theory of negligence since it is well settled that minors are liable for their torts. ANS: F MSC: AACSB Analytic 4. Seventeen-year-old Teresa wants to disaffirm her student loan agreements. Most states will not allow a minor to avoid contracts for student loans. ANS: T MSC: AACSB Analytic 5. In a contract to sell necessaries to a minor, these goods and services are limited to medical care, food, and shelter. ANS: F MSC: AACSB Analytic 6. If Carrie, age 14, contracted to buy a fur coat by mail, the coat manufacturer would not have to send it since the contract was void. ANS: F MSC: AACSB Analytic 7. Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority. ANS: F MSC: AACSB Analytic 8. In general, if a minor lies about her age in order to induce the seller to contract with her, she cannot disaffirm that contract. ANS: F MSC: AACSB Analytic 9. If a person is mentally ill, every contract they make is voidable. ANS: F MSC: AACSB Analytic 10. The doctrine of necessaries applies in the same way to minors and mental incompetents.
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ANS: T MSC: AACSB Analytic 11. The contracts of a person who is adjudicated insane and placed in care of a guardian are void. ANS: T MSC: AACSB Analytic 12. If a person with a mental condition that impairs her ability to act in a reasonable manner enters a con- tract that is grossly unfair, the contract is voidable. ANS: T MSC: AACSB Analytic 13. By the majority view, a minor need only return any property he has received from the other party if the minor wishes to disaffirm the contract. He has no duty to return the property in the same condition in which he received it. ANS: T MSC: AACSB Analytic 14. In general, a minor may only disaffirm a contract after he has reached the age of majority. ANS: F MSC: AACSB Analytic 15. All states agree that a minor who has fraudulently misrepresented her age when entering into a contract has no power to disaffirm the contract. ANS: F
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Mann_BLRB 9_TB_Ch14 - Chapter 14-Contractual Capacity...

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