SMC Business Law Sec 1059 Week 4 Chp. 9 Quiz (2015)

Week 4 Chp. 9 QuizGrading SummaryGrade Details – All QuestionsQuestion 1. Question : An adult may disaffirm his contract with a minor if: Student Answer: The 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 aboveQuestion 2. Question : Which of the below theories most benefits the adult who has contracted with a minor who is able to successfully disaffirm the contract? Student Answer: The Benefit Theory The Theory that places the adult in statu quo (ante) The classical common law theory regarding minors right of disaffirmance None of the aboveQuestion 3. Question : 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: Student Answer: 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 DepreciationQuestion 4. Question : Ordinarily, an item is not considered to be a necessary if a parent or guardian already provides the minor with the item. Student Answer: True False Question 5. Question : Which of the underlying is least likely to amount to ratification of a contract entered into by a minor? Student Answer: Performing one’s duties under the contract after reaching the age of majority Accepting performance from the other party to the contract after reaching the age of majority Failing to disaffirm a completely executory contract within one month after reaching the age of majority Making an oral statement that, “I ratify this contract” immediately prior to reaching the age of majorityQuestion 6. Question : 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. Student Answer: True FalseQuestion 7. Question : The traditional rule is that, where the consideration given to a minor – under a minor’s contract – has been lost, stolen or dissipated, the minor can disaffirm without compensating the adult for the loss in any way. Student Answer: True False Question 8. Question : A contract entered into by a mentally impaired person who HAS NOT been adjudged insane by a court of law: Student Answer: Can be disaffirmed only after the person who lacked mental capacity regains her mental competency Can be ratified only after the person who was mentally impaired regains her mental capacity and then demonstrates approval of the contract Is void rather than voidable A and B are trueQuestion 9. Question : A minor’s right to disaffirm a contract ends on the day the minor reaches majority. Student Answer: True False Question 10. Question : Baron provided a necessity to Conrad pursuant to a contract between them. Baron would be able to recover the reasonable value of the provided necessity even if: Student Answer: Conrad was mentally incompetent when he agreed to purchase it Conrad was a minor when he agreed to purchase it Conrad was intoxicated when he agreed to purchase it All of the above None of the aboveQuestion 11. Question : A contract entered into by a person who was PREVIOUSLY adjudged insane by a court of law: Student Answer: 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 aboveQuestion 12. Question : A minor is generally held to lack legal capacity to contract even if he is married and employed full time. Student Answer: True FalseQuestion 13. Question : A minor’s contract for necessaries makes the minor liable for the reasonable value of the necessaries actually furnished to her. Student Answer: True FalseQuestion 14. Question : In almost all states today, the age of contractual capacity is eighteen. Student Answer: True FalseQuestion 15. Question : 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. Student Answer: True False Question 16. Question : Sunyvilla 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. Would the signed release be valid if a lawsuit was brought on behalf of Suzie against the camp? Student Answer: No state would honor the release because Suzie was a minor when it was signed All states would honor the release and bar Suzie from pursuing her lawsuit because parents have the fundamental right to make decisions concerning their minor children The majority of states would refuse to honor the release because Suzie was a minor when it was signed None of the aboveQuestion 17. Question : Which of the underlying contracts, if any, is/are void? Student Answer: 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 DQuestion 18. Question : 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 Student Answer: True False Question 19. Question : 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. Student Answer: True False Question 20. Question : 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. Student Answer: True False