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Chapter Quiz
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1
Capacity means the ability to incur legal obligations and acquire legal rights.
A)True
B)False
2
Any words or acts by a minor that effectively communicate the desire to cancel a contract can constitute disaffirmance.
A)True
B)False
3
Contracts of people who suffer from a mental disease at the time they enter into a contract are usually considered void.
A)True
B)False
4
Minors disaffirming contracts for necessaries are still required to pay the reasonable value of the necessaries furnished to them under the contract.
A)True
B)False
5
Those who are suffering from a mental defect may disaffirm the contract.
A)True
B)False
6
If a party has been drinking at the time a contract was formed, the party is seen as lacking the capacity to form the contract.
A)True
B)False
7
Which of the following are considered to lack capacity to contract?
A)Minors
B)Persons suffering from mental illness
C)Intoxicated persons
D)All of the above
8
Jon, age 17, wants to lease a car from ABC Auto Company. Jon misrepresents his age on a false identification card as being 21. Jon leases the vehicle. Can Jon later disaffirm the contract?
A)Some courts allow Jon to cancel the contract, even though he misrepresented his age.
B)Since a car is a necessary of life, Jon will not be able to disaffirm the contract.
C)The age of majority in most states is now 17, so Jon will not be able to disaffirm the contract.
D)Both B and C.
9
If a minor disaffirms a contract, he or she is still obligated to:
A)pay the reasonable value of "necessaries" received under the contract.
B)return any consideration received from the other party.
C)A and B
D)None of the above
10
According the Restatement (Second) of Contracts, which of the following must be shown in order for intoxication to be used as a ground for lack of capacity?
A)Intoxication was so extreme that the party was unable to understand the nature of the contract.
B)The other party has reason to know that the affected person is so intoxicated that he could not understand the transaction.
C)A and B
D)None of the above





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