Understanding Business and Personal Law

Unit 7: Planning for the Future

Capacity to Contract


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


2.	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.


3.	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.


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


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


7.	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.


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


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


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