Understanding Business and Personal Law

Chapter 7: Contractual Capacity

Capacity to Contract


1.	If a mentally impaired person does not have a guardian, then
		A)	the reasonable time clause has no effect.
		B)	he or she has no rights as an adult.
		C)	his or her contracts are voidable.
		D)	all his or her assets are frozen.


2.	If a minor misrepresents his or her age, then he or she has committed fraud.
		A)	TRUE
		B)	FALSE


3.	Many states give minors the capacity to enter into contracts for car insurance and life insurance.
		A)	TRUE
		B)	FALSE


4.	Ratification can only be accomplished
		A)	when a business advertisement directly targets minors.
		B)	when both parties of the contract agree.
		C)	two weeks prior to the 18th birthday.
		D)	upon a minor reaching the age of majority.


5.	By permitting minors to have the privilege of disaffirming contracts, the law
		A)	provides young people a second chance when they use poor judgment.
		B)	allows minors who misrepresent their age a second chance.
		C)	declares them emancipated.
		D)	assumes all minors are immature and lack experience.


6.	The age of majority is
		A)	one day after a person's 18th birthday.
		B)	when most states allow the purchase of alcoholic beverages.
		C)	age 21 in most states.
		D)	the age of legal adulthood.


7.	In times of war, foreign-born people who are designated as enemy aliens are denied certain legal capacities.
		A)	TRUE
		B)	FALSE


8.	Ratification can only be accomplished in writing.
		A)	TRUE
		B)	FALSE


9.	A minor who marries and gives up all rights to parental support is considered
		A)	a minor.
		B)	abandoned.
		C)	emancipated.
		D)	ratified.


10.	If two minors enter into a contract with each other, then the contract is valid.
		A)	TRUE
		B)	FALSE