Reference no: EM131051429

Question 1. Though the law regarding minors' contracts is designed to encourage adults to deal with minors, the opposite is true if the subject matter of the contract involves a necessity. In other words, the law regarding minors' contracts for necessities is designed to discourage adults from dealing with minors.

True

False

Question 2. Modernly, minors contract a great deal of business for themselves. These minors often spend their own money without oversight or restriction. The law does not question their right to make purchases if they have the money to do so. To allow these minors to avoid perfectly fair and reasonable contracts is inconsistent with the practice of proper moral influence upon young people and it is intolerably burdensome to honest merchants who deal with minors. Identify which, if any, of the underlying best identifies this statement:

The traditional common law regarding minors' contracts

The Restatement 2d

The Uniform Commercial Code

Both A and B

The two modern views. One is called the Benefit Rule and the other is the Rule Requiring Deduction for Depreciation

Question 3. Luke, who was 17 at the time, sold his 2000 Lexus to Bundy-Rent-A-Wreck (BRW). BRW then sold the car to Larry who purchased it in good faith. Luke, just before his eighteenth birthday, sued BRW to disaffirm the contract. The court would allow the disaffirmance and would order Larry to return the Lexus to Luke.

True

False

Question 4.4. A person who has been decreed mentally incompetent cannot thereafter enter into a binding contract unless and until a court rules that said person's capacity has been restored.
True

False

Question 5. A contract entered into by a person who was PREVIOUSLY adjudged insane by a court of law:

Is void

Is enforceable by the sane party if she had no knowledge of the court adjudication

Cannot be disaffirmed after the insane person has regained her mental capacity

Is voidable

None of the above

Question 6. Alice, a minor, and John (an adult), formed a contract. Which, if any, of the below examples could be effectively used in a court of law to prove that a Alice actually ratified her contract with John?

Alice retained the benefits of the contract for one year after becoming an adult

Alice, after becoming an adult, repeatedly assured John that she was happy with their contract

Alice failed to mention anything to John for almost 8 months after she reached majority

All of the above

Question 7. Which of the underlying contracts, if any, is/are void?

A contract entered into by an unemancipated minor

A contract entered into by a person who has already been adjudged insane by a court of law

A contract made by a person who at the time was under the influence of a mind altering drug

A contract entered into by a minor who receives no support from her parents or legal guardian

Both A and D

Question 8. Which, if any, of the underlying contracts would a minor be able to disaffirm?

Contract to support a child

Contract for an educational loan made by the government

Contract for medical insurance

Contract for life insurance

A minor could not disaffirm any of the above contracts

Question 9. Under the theory that alcohol and drug use should not be rewarded, today most courts say that contracts made by intoxicated people are perfectly binding, no matter how severe the intoxication.

True

False

Question 10. Robert 17, wants to lease a truck from Best Deal Auto Rentals (BDAR), but knows that BDAR rents only to adults. Robert presents false identification showing him to be an adult. He looks like an adult. BDAR relies on the misrepresentation and leases a truck to Robert. Robert wrecks the truck and is sued by BDAR. Robert's defense is that he lacked capacity when he entered into the contract and should therefore not have to pay for any damage to the truck. The law regarding the facts of this case is uniform throughout this country and it favors Robert. No court in this country would enforce this contract due to the fact Robert was a minor when the contract was made.

True

False

Question 11. Ordinarily, an item is not considered to be a necessary if a parent or guardian already provides the minor with the item.

True

False

Question 12. A minor's contract for necessaries makes the minor liable for the reasonable value of the necessaries actually furnished to her.

True

False

Question 13. A person who at the time of the contract lacked capacity due to mental impairment can ratify the contract once he regains his normal mental capacity

True

False

Question 14. Minor entered into a contract when she was 17. The adult to this contract fully performed his obligations. Eight (8) months after turning 18, she attempted to disaffirm the contract. By waiting so long, she has created the risk of having the court rule that she ratified the contract.

True

False

Question 15. Benjamin, who was 17, was kicked out of his family home due to his repeated inappropriate behavior. He signed a one year lease for an apartment in Santa Monica, CA for $1,000.00 per month. Four months into the lease he reconciled with his parents, moved back home, and refused to pay for the remaining 8 months of rent. Moreover, he sued to have a court order the landlord to return to him the $4,000.00 that he had already paid in rent.

By proving the apartment was a necessity, the landlord would be allowed to keep only that portion of the 4,000.00 that was reasonable for the type of apartment leased to Benjamin

The landlord would not be able to recover any of the balance for the remaining 8 months

Benjamin would be able to disaffirm the remaining 8 months of the contract because the apartment was no longer a necessity

All of the above

Question 16. An adult may disaffirm his contract with a minor if:

he adult does so before the minor ratifies the contract

The minor is emancipated

The contract is for a necessity

The adult is able to prove to the satisfaction of the court that the contract was a fair one

None of the above

Question 17. Fred, a 15 year-old child prodigy, registers as a freshman at Yale University. Fred signs a 10-month contract to live in the Yale dormitories at $400 per month. Assume that the dorm is necessary and that his parents refused to pay. After living in the dorm for 3 months, Fred moved out into his own apartment. Yale University was unable to find a student to replace Fred and sues him for breach of contract. A court would rule that Fred was responsible to pay the reasonable value of the room for the time he lived in the dormitory but he would not be liable for the remaining 7 months.

True

False

Question 18.18. Which of the following is true in a situation wherein a minor lies about her age in order to induce the adult to enter into the contract with her?

Today, some courts will allow the minor to disaffirm the contract despite the lie

Traditionally, the courts would not allow the minor to disaffirm the contract when the minor lied, because this approach would reward dishonesty

Today, all courts agree that a minor can disaffirm the contract despite the lie

Today, all courts agree that a minor cannot disaffirm the contract if the minor lied

None of the above

Question 19. Sunnyvilla Day Camp requested that Suzie's mother sign a release absolving Sunnyvilla of liability should Suzie get hurt while in camp. As her luck would have it, Suzie fell off the jungle gym and was then bitten by Sugar the camp dog and mascot. Oh, Suzie was 10 years old when her mother signed the release. Fearing that a court would not honor the release, Sunnyvilla entered into a Settlement Agreement with Suzie's mother who was her legal guardian. The court in the county where the agreement was made, approved it. Under these circumstances, the agreement is enforceable.

True

False

Question 20. A minor's right to disaffirm a contract ends on the day the minor reaches majority.

True

False