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Exam 4: Capacity and Legality

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Question 31

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Julie buys an auto from John when she is 17.When she turns 21,Julie decides that she does not want the automobile.The age of majority in Julie's state is 18.Can Julie disaffirm this contract?

A) Yes;all contracts made while a minor may be disaffirmed.
B) Yes;Julie has a "reasonable time" after reaching majority to disaffirm this contract,and she acted within a "reasonable time."
C) No;Julie had a "reasonable time" within which to disaffirm the contract,but a "reasonable time" has passed.
D) No;to disaffirm the contract,Julie must have acted before she turned 18.Now it is too late.

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Question 32

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A court's only remedy upon finding that a contract is unconscionable is to not enforce it.

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Question 33

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Exculpatory clauses often are found illegal because they violate state statutes.

If a court finds that the subject matter of a contract is not legal,the court will undo the contract and place the parties in the status quo.

Parents still owe a legal duty to provide food,clothing,and shelter for their children regardless of emancipation.

Where a contract has been found to violate a specific statute,the goal of contract law is to impose the appropriate criminal penalty on the party or parties found to violate the statute.

A contract to discriminate against somebody on the basis of race is illegal because it usually violates state and or federal statutes;if not,it is illegal as being contrary to public policy.

Bob is 16 years old and recently purchased a car.His father also signed the contract.In May,Bob started a lawn care business,and purchased two lawn mowers,one each from two different stores.Bob used both of the lawn mowers for several months without any problems.Then he began having trouble with the mower he bought from store A.The store made repairs and the mower seems to be working properly,although he was without that mower for two weeks.Although he has had no trouble with the mower from store B,he recently learned that the price of $800 that he paid was $200 more than the mower was worth.It is now October and Bob has decided that he wants to disaffirm both of the contracts for the mowers.Discuss the cases.

Generally,the courts will not enforce an illegal contract,but will leave the parties where it finds them.

Someone who is not yet a licensed real estate agent can legally collect a fee for real estate services.

An unlicensed contractor who performs services is entitled to payment for his services even if the licensing statute in question is regulatory in nature.

Each state has its own list of the items that are considered necessaries and such a list would then apply to all minors in that state.

The adult party to a contract with a minor has the option of choosing whether to enforce the contract.

Arthur had been adjudicated insane.During his period of insanity,Arthur sold some unimproved real estate to Katrina for $5,000,its fair value.Katrina did not know that Arthur was insane.In fact,he acted perfectly normal in every way.Arthur spends this $5,000.Arthur's guardian learns of this transaction and sues to void the contract and recover the land.What results?

A minor may still be obligated to pay for tools of trade and education.

Generally,the courts will not enforce illegal contracts,but there are some exceptions.Which of the following would be exceptions where the courts would enforce the contract or allow some recovery?

Sid is a 15-year-old sophomore at East High School.He purchases a computer at a local store for a computer class,but wants to return it after using it for a couple of weeks because his classmates have nicer computers than his and he wants to get one of the better models.Sid can:

All states allow gambling contracts to be enforced in the courts.

John hires Jane to steal a particular type of car for him.Jane demands $2,000 payment in advance,which John pays.Jane does not deliver the stolen car at the appointed time.John sues Jane.Which of the following is most likely?

A minor's ratification of a contract must be express and cannot be implied.