Chapter 13: Capacity to Contract

Which of the following is correct regarding capacity to contract?

It is presumed to exist.

Which of the following is correct regarding whether a minor can ratify a contract while still a minor?

A minor cannot ratify a contract while still a minor.

Which of the following is correct regarding contract ratification by a person who regains his capacity?

A person who regains mental capacity can ratify his contract just like a minor who attains majority.

Why are minors generally held liable for the reasonable value of necessaries furnished to them?

Because penalizing adults who supply minors with necessaries would discourage other adults from doing the same

Which of the following is correct regarding whether the personal representative of a person who dies or is adjudicated insane may ratify that person's contract?

If a person dies or is adjudicated insane, her personal representative may ratify the contract.

With regard to contract enforcement, which of the following is correct regarding mental impairment and/or intoxication?

Lack of mental capacity can stem from dementia.

What are generally defined as those things that are essential to a minor's continued existence and general welfare?

Necessaries

Which of the following is correct regarding the the disaffirmance of a contract entered into between a minor and an adult?

Only the minor can disaffirm the contract.

Which of the following is correct regarding a minor's right to disaffirm a contract when he misrepresented his age upon entering into the contract?

Some courts hold that the minor is estopped from raising the defense of minority and is therefore bound by the contract.

Which of the following is correct regarding whether a minor who successfully disaffirms a contract must return the consideration he received from the adult contracting party?

The minor must return to the adult any consideration still in his possession that he received from the adult.

Which of the following is correct regarding the liability of people lacking mental capacity for necessaries?

They are liable for the reasonable value of necessaries, on the same basis and for the same reasons as minors

A minor may disaffirm a contract ______

at any time during minority and for a reasonable time thereafter

In theory, if a minor misrepresents her age when entering into a contract, her right to ______ be affected because one who lacks capacity ______ acquire it merely by claiming to have capacity

disaffirm should not; cannot

A minor may disaffirm a contract by

doing or saying anything that clearly indicates to the other party an intent not to be bound by the contract

If a person who lacked mental capacity disaffirms a contract, the incapacitated party must return the consideration and return the other party to the status quo ______

if there was no reason for the other party to have known of the lack of capacity

A minor who successfully disaffirms a contract ______ he has given to the adult party to the contract

is entitled to recover any consideration

People lacking mental capacity are ______

liable for the reasonable value of necessaries

Which of the following is a major class of persons who have been traditionally treated as having limited capacity to contract because the law seeks to protect them in their contractual relations with others?

minors

Minors are generally held liable on a(n) ______ contract basis for the ______ value of necessaries furnished to them

quasi; reasonable

The idea behind ______ is that adults who indicate an intent to be bound by contracts they entered into as minors should be bound to those contracts and denied the right to disaffirm thereafter

ratification

A minor who does not disaffirm her contract within a reasonable time after attaining majority is held to have ______ the contract ______ the right to disaffirm.

ratified; and thereafter loses

If a person who lacked mental capacity disaffirms a contract, the incapacitated party must return the consideration and return the other party to the ______

status quo

A contract made with a minor can be disaffirmed by

the minor or his or her personal representative in the event of the minor's death

Which of the following is correct regarding necessaries?

they include medical care

Mental capacity is defined as the ability to ______

understand the nature and effect of a contract

If a party to a contract lacks the capacity to contract, the contract is ______

void or voidable, depending on the kind of incapacity involved

If a court finds that a person lacked mental capacity at the time the contract was formed, the contract is ______

voidable at the election of that person or his guardian or administrator