Business Law Chapter 14

Boyd is a minor. As a minor, Boyd has the capacity to enter into

a VALID contract.

Jenna, a minor acting on her own, signs a contract to buy a horse and its tack from Field Equine Ranch. Later, after taking possession of the horse and tack, Jenna disaffirms the deal. She

MUST RETURN BOTH the horse and the tack.

Boz runs an illegal gambling business and pays Colin, a law enforcement officer, not to interfere. The payments are discovered. Boz and Colin are sent to prison. With respect to the amount of the payments, Boz can recover

NONE of it.

Brasilia, a real estate broker licensed only in Connecticut, con¬cludes a land sale in Delaware. She can

NOT collect the commission, keep it, or foreclose on the property.

Noni, a seventeen-year-old, signs a contract to sell her car to Metro Used Cars. The next day, Noni tells Metro that she's decided not to sell the car. Noni is

NOT liable to Metro.

Jack, a minor, takes out an automobile insurance policy and pays a $1,000 premium. If Jack disaffirms the contract, he can most likely recover

$1,000.

Fernando obtains a consumer loan from Greater Regional Credit Union at an interest rate that exceeds the state's maximum. Greater Regional has

committed usury.

Delia enters into, and fails to disaffirm soon after reaching the age of majority, a contract with Electronics Stores, Inc. (ESI). Later Delia attempts to disaffirm the contract. ESI files a suit against her. The court will most likely consider the contract ratified if it is

executED.

Solana, a minor, enters into a contract to buy a dozen movies from eHD TV Stream, Inc., an Internet video service. Solana reaches the age of ma¬jority and does not disaffirm the contract nor make payment on it. eHD files a suit against her. The court will most likely consider the contract ratified if it is

executED.

Smitty enters into an illegal bargain with Taylor. Smitty can enforce the contract or recover for its value if he has been induced to enter into the bargain as a result of

fraud.

Stacy, a minor, charges the cost of an expensive leather jacket at a Girl's Trend store. Two nights later, Stacy loses the jacket at Minors Only Club. She disaffirms the jacket's purchase. Stacy owes Girl's Trend the reasonable value of the jacket

if it is deemed a "NECESSARY."

Ruth, a minor, charges groceries at Sam's Mini-Mart. Two days later, Ruth disaffirms the purchase. Ruth owes Sam's

the REASONABLE value of the groceries.

U-Can-Own-It Corporation sells appliances to less educated consumers, including Viv, on installment plans. U-Can-Own-It files a suit against Viv when she stops making payments. Viv claims that the deal is unconscionable. The court will most likely consider

the parties' relative bargaining power.

Lindsey, an emergency medical technician, is called to an accident scene by Nicole and renders medical care to Marvin, a minor. Lindsey may recover the cost from

Marvin.

Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a certain destination for $5,000. Cross-Country delivers the crates, but Baldwin does not pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can

RECOVER $5,000 FROM BALDWIN.

Yvon and Zach are minors who marry each other. Their minority status may be terminated under the laws of

SOME states.

A contract between Eppie and Fab to lease real property contains an exculpatory clause. This clause is most likely

UNenforceable.

Bree is a real estate broker licensed only in Minnesota. She concludes a sale in North Dakota on O'Reilly's behalf. Bree's contract with O'Reilly to be paid a certain commission for the sale is

UNenforceable.

Chris, a minor, signs a contract to buy alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is

VOID AS A MATTER OF LAW.

A deal between Lou and Mike requires a transfer of stolen body building equipment for counterfeit currency that Mike will attempt to spend at Now! Discount Mart. This contract is

VOID.

Koko signs a covenant not to compete as part of a sale of her ongoing medical equipment business to Laurel Valley Medico, Inc., in exchange for a bonus payment. The covenant is most likely enforceable by

both parties.

Max, a minor subject to his parents' care and control, signs a contract to rent an apartment from Noel for one year. Before the end of the term, Max moves out. Noel sues for the rent for the rest of the term. Max can

disaffirm the contract AND avoid liability for the rent.

Roxanne, a minor, is living at home with her parents, but signs a lease with a landlord to rent an apartment. Roxanne can

disaffirm the lease WITHOUT LIABILITY.

Jacquie signs a contract to buy a car just before reaching the age of majority. After reaching the age of majority, Jacquie does not take possession or make payments. Most courts would hold, with respect to the contract, that this is

disaffirmance.

Desiree signs a contract with Elena to kill Francois. Desiree pays Elena but she refuses to perform. Desiree can

do NOTHING with respect to the contract.

Olga, a minor, signs a contract to buy a computer from Phil, the owner of Quality Computer Store. Olga's right to disaffirm the contract

does not change the fact that Phil is bound by the contract.

Dante enters into a contract with Rosalinda, who does not have contractual capacity. Dante can enforce the contract if Rosalinda

does not choose to avoid the contract.

Cary is fifteen. In most states, Cary would be considered a minor because she is under the age of

eighteen.

Orin relinquishes the right to his daughter Neko's control, care, custody, and earnings. This act is

emancipation.

Regular Insurance Company violates a state statute when selling an insurance policy to Simone. As a member of the class of persons protected by the state statute, Simone can

enforce the contract OR recover the payment.

Opie enters into a contract with Belle. Later, Opie is adjudged mentally incompetent. Raye, Opie's daughter, attempts to void Opie's contract with Belle on the ground of Opie's incompetency. The contract is

enforceable if OPIE HAD CAPACITY at the time the contract was formed.

Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone service contract with Wander Talk, Inc., at more than the average market price. This contract is

enforceable.

Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real market value. This deal is most likely voidable if Clio

is so intoxicated as to LACK COMPREHENSION of the legal consequences.

Jolie signs a contract with Keaton, an unlicensed physician, to perform plastic surgery—a medical procedure. This contract is enforceable by

no one.

Mica, a minor, signs a contract to pay National Fitness Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is

ratification.

While a minor, Jason buys a large-screen HD TV and home theatre system that he continues to use after reaching the age of majority. After a reasonable time has passed, Jason will be considered to have

ratified the contract.

Elmo, a minor, misrepresents his age to be twenty-one and contracts to buy a car from Fine New Autos. Ordinarily, Elmo can disaffirm the contract

under ANY circumstances.

A court adjudicates Huck mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Huck signs a contract to sell his farm to Galen for its real market value. The contract is

void.

Fay is mentally incompetent but has not been so adjudged by a court. Any contract Fay enters into is

voidable if Fay LACKS THE CAPACITY to comprehend the consequences.

On Tim's eighteenth birthday, he decides that he no longer wants to keep a car he bought from Woody's Autos, Inc., when he was seventeen. His right to disaffirm the deal will depend on

whether TIM ACTS within a reasonable period of time.