CHAPTER 7 Capacity to Contract

Transcription

1 Reviewing Legal Terms DIRECTIONS: Fill in the blank with the correct vocabulary term. alien guardian majority minor ratify capacity infancy minority necessaries rescind 1. A person is no longer a minor when he or she reaches the age of. 2. Minors may avoid or their contracts if they choose to do so. 3. Minors are held for the fair value of. 4. A person who looks after the affairs of an incompetent person is a(n). 5. Incompetent persons lack the to contract. 6. A person who has not reached the age of majority is a(n). 7. In legal terms minority is the same as. 8. A person who is living in this country but who owes allegiance to another country is called a(n). 9. Minors may be bound by their contracts if they approve or those contracts. 10. A person who has not yet reached his or her 18th birthday is still in the age of. Answer 1. majority 2. rescind 3. necessaries 4. guardian 5. capacity 6. minor 7. infancy 8. alien 9. ratify 10. minority Understanding Business and Personal Law Student Activity Workbook Chapter 7 61

2 You re the Judge DIRECTIONS: For each of the following cases, circle Yes or No to indicate your decision. Then, in your own words, state the legal principle or legal reason that applies to the facts in the case. Answer 1. Mary Robinson, a 17-year-old high school graduate, applied to Ed Rice for a job and was hired on a one-year contract. Nothing was said about Robinson s age, but when Rice discovered she was only 17, he discharged her. Did Rice have a legal right to do this? An adult who contracts with a minor is usually bound by that contract. 1. Yes No 2. Patty Okari, 14, bought a video game at a store. A sign said: No Returns All Sales Final. After using the game for a week, she returned it to the store and asked for a refund. Is she legally entitled to a refund? Minors may return goods other than necessaries and get their money back. In a few states, an amount may be deducted if the goods are damaged or soiled. 3. Ethel O Connor bought a CD player on the day before her 18th birthday. That same day, she changed her mind and sought to return it and get her money back. She claimed that she could return the purchase because she was a minor. Was she correct? Persons reach their majority at the beginning of the day before their 18th birthday. 4. A court declared Peter Frankori insane, and a guardian was appointed to look after his affairs. He wandered away from the mental institution where he had been placed and contracted to buy a desk, which had to be specially manufactured by the Ross Furniture Co. Frankori s guardian refused to accept the desk when it was delivered a month later. Can the company enforce the sale? Contracts of persons who have been declared insane by a court and for whom guardians have been appointed are void. 5. Joe Steinberg, who is 17, bought a tent trailer and hitch from the Leisure Time Co. Later, Steinberg decided that he did not want the tent trailer, but he did want the hitch. May Steinberg disaffirm the contract for one but not the other? A minor may not affirm parts of a contract that are favorable and disaf- firm the unfavorable parts. He or she must disaffirm all or none of the contract. 2. Yes No 3. Yes No 4. Yes No 5. Yes No 62 Understanding Business and Personal Law Student Activity Workbook Chapter 7

3 Understanding Legal Concepts DIRECTIONS: Answer the following questions and explain each of your answers. 1. Is it illegal for a minor to enter a contract? Explain your answer. No. A minor can enter a contract. However, the minor also has the ability to rescind the contract. 2. Does the question of competency apply to minors alone? Explain your answer. No. The question of competency also involves mental incompetents, persons drugged or intoxicated, convicts, and aliens. 3. May a competent adult avoid a contract with a minor? Explain your answer. No. A person s status as a minor allows only that person to avoid the contract, not the adult who entered into the contract with the minor. 4. May a minor enforce a contract if he or she chooses to not disaffirm? Explain your answer. Yes. If the minor chooses to enforce a contract, that contract will be enforced. 5. Can a minor be absolutely sure of his or her contractual capacity without consulting the statutes of his or her own state? No. The contractual capacity of minors will differ from state to state. Understanding Business and Personal Law Student Activity Workbook Chapter 7 63

4 Understanding Legal Concepts (continued) 6. May a minor be held responsible for his or her contracts for necessaries? Yes. A minor may be held responsible for his or her contracts for necessaries. Necessaries are items that the minor needs for his or her health or welfare that are not being provided by the minor s parents or guardian. 7. May a minor disaffirm a contract without returning the benefits he or she still possesses? No. A minor can disaffirm a contract but must return the benefits he or she still possesses. 8. May a minor disaffirm part of a contract and affirm other parts? No. A minor cannot disaffirm part of a contract and affirm other parts. 9. Is a contract void when made by a person declared insane by a court and for whom a guardian has been appointed? Yes. A contract is void when made by a person declared insane by a court and for whom a guardian has been appointed. 10. Is it possible to enter into a valid contract with a person who is insane but for whom a guardian has not been appointed? Yes. It is possible to enter into a valid contract with a person who is insane but for whom a guardian has not been appointed. Such a contract would be voidable by the person with the mental problem if the problem were so severe that the person did not comprehend the nature of the agreement. Otherwise, the contract would be valid. 64 Understanding Business and Personal Law Student Activity Workbook Chapter 7

5 Legal Activity 1: The Case of the Sneaky Snowboarder SCANS COMPETENCIES ACHIEVED Creative Thinking, Problem Solving, Reasoning, Acquiring and Evaluating Information OBJECTIVE: To learn what is required for a minor to disaffirm a contract. Ursula Hathaway was 16 when she entered a contract to purchase a snowboard from the Georgetown Sporting Goods store. Later, Ursula decided to disaffirm the contract based on her minority. The store agreed that she could disaffirm the contract but asked that the snowboard be returned. Ursula argued that she did not have to return the snowboard because of her minority. Was Ursula correct? Explain your answer. No. Ursula was incorrect. If a minor still has the merchandise he or she received upon entering a contract, that merchan- dise must be returned when the contract is disaffirmed. Understanding Business and Personal Law Student Activity Workbook Chapter 7 65

6 Legal Activity 2: Working with Legal Issues SCANS COMPETENCIES ACHIEVED Creative Thinking, Problem Solving, Reasoning, Acquiring and Evaluating Information OBJECTIVE: To learn how to construct a disaffirming letter in your own words. Assume that you bought an X-701 camera with a 50mm f/1.7 lens from the Slater Camera Co. for $ when you were 16 years old. You have had the camera for seven months, and it does not work properly. When you attempt to return the camera, the sales clerk at the store tells you that it is no longer under guarantee. Write a letter to the Slater Camera Co., 122 Ocean Ave., Salem, Massachusetts 01970, disaffirming the contract to buy the camera and asking for your money back. Use the sample letter for disaffirming a contract of a minor, shown on page 153 of the textbook, as a guide in writing the letter. Letters will vary but should resemble the sample on page 153 of the student text. 66 Understanding Business and Personal Law Student Activity Workbook Chapter 7

7 Law Online Hate Crimes All citizens have the right to live and work in peace. However, discrimination, hatred, and harassment sometimes plague individuals and rob them of their peace of mind and sometimes their lives. DIRECTIONS: Using the Internet, find organizations that help combat hate crimes. Fill in the table below. List three Web site names and addresses. Answers will vary but should include such Web sites as AntiDefamation League, StopTheHate, and PFLAG. List the types of crimes they battle. Answers will vary but should include racism, sexism, and homophobia. List the resources that are available. Answers will vary but should include counseling, volunteering opportunities, and tips on how to battle harassment. Critical Thinking Questions 1. What are some common attributes of the Web sites you found? Answers will vary but should include intolerance for hate, resources available for victims, tips to combat racism and sexism, and religious beliefs. 2. What types of actions could be considered homophobic? What would you do if one of your friends exhibited these actions? What would you do if a teacher exhibited these actions? Homophobic actions include, but are not limited to, name calling, violence, hazing, and harassment. Answers will vary concerning what an individual would do if these actions took place. 3. Go to Tolerance.org. List some everyday actions that you can perform to help prevent hate crimes from occurring in school. Answers should include taking a stand against hate literature, music, and Web sites; and speaking up when bigotry arises. Understanding Business and Personal Law Student Activity Workbook Chapter 7 67

8 Self-Assessment Quiz DIRECTIONS: Circle the letter of the choice that best completes the statement or answers the question. 1. When a person reaches the age of he or she is no longer a minor. (A) majority (B) infancy (C) competency (D) plurality 2. When a minor attempts to get out of a contract, he or she is said to have attempted to rescind or the contract. (A) ratify (B) avoid (C) complete (D) emancipate 3. Minors are held for the of necessaries. (A) exact value (B) fair value (C) extraordinary values (D) none of the above 4. A guardian is said to look after the affairs of a(n) (A) fiduciary person (B) incompetent person (C) legal person (D) none of the above. 5. Incompetent persons lack the to contract. (A) intelligence (B) desire (C) capacity (D) none of the above 6. A person who has not reached the age of majority is a(n) (A) infant (B) minor (C) both (D) neither. 7. In legal terms minority is the same as (A) incompetency (B) legality (C) infancy (D) majority. 8. A person who is living in this country but who owes allegiance to another country is called a(n) (A) minor (B) alien (C) both (D) neither. 9. Minors may ratify or their contracts if they so choose. (A) approve (B) complement (C) legislate (D) none of the above 10. A person who has not yet reached his or her 18th birthday is still in the age of (A) minority (B) majority (C) competency (D) none of the above. 68 Understanding Business and Personal Law Student Activity Workbook Chapter 7