TJ_Comp 20_TB_Ch14

TJ_Comp 20_TB_Ch14 - Chapter 14CAPACITY AND GENUINE ASSENT...

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Chapter 14—CAPACITY AND GENUINE ASSENT TRUE/FALSE 1. Certain persons cannot make contracts that will bind them. ANS: T MSC: AACSB Analytic 2. Factual incapacity is imposed because of the class or group to which a person belongs. ANS: F MSC: AACSB Analytic 3. Ordinarily, every party to a contract is presumed to have contractual capacity until the contrary is shown. ANS: T MSC: AACSB Analytic 4. As the social force of protecting the person has gained recognition, many concepts of contractual inca- pacity have been abolished. ANS: T MSC: AACSB Analytic 5. Discriminatory and punitive incapacities have largely disappeared. ANS: T MSC: AACSB Analytic 6. Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party. ANS: F MSC: AACSB Analytic 7. If any party to a contract does not have contractual capacity, the contract is either voidable or void. ANS: T MSC: AACSB Analytic 8. Once a contract has been affirmed, it no longer can be avoided. ANS: T MSC: AACSB Analytic 9. When a minor avoids contracts, the minor always must return the other contracting parties to their ori- ginal financial positions. ANS: F MSC: AACSB Analytic 10. The "necessaries" of minors are concisely defined by law. ANS: F MSC: AACSB Analytic 11. Parents are liable for contracts signed by their minor children if the terms are reasonable. ANS: F MSC: AACSB Analytic
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12. The parent of a minor is liable for payment of the purchase price of a contract that the minor has avoided. ANS: F MSC: AACSB Analytic 13. A contract made by an incompetent person after a guardian has been appointed is voidable. ANS: F MSC: AACSB Analytic 14. The appointment of a guardian for an insane person does not avoid a contract made by the person the day before the guardian was appointed. ANS: T MSC: AACSB Analytic 15. A person who has drunk too much alcohol at a party and signs a contract may be able to rescind that contract. ANS: T MSC: AACSB Analytic 16. A unilateral mistake regarding expectations or the law does not have any effect on a contract. ANS: T MSC: AACSB Analytic 17. The seller of a painting is not bound by the sales contract if the painting purchased was considered of little value and only later discovered to be valuable to the surprise of both buyer and seller. ANS: T MSC: AACSB Analytic 18. A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud. ANS: F
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TJ_Comp 20_TB_Ch14 - Chapter 14CAPACITY AND GENUINE ASSENT...

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