Business Law

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Quiz 15 :

Capacity and Consent

Quiz 15 :

Capacity and Consent

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Sixteen-year-old Travis Mitchell brought his Pontiac GTO into M M Precision Body and Paint for body work and a paint job. M M did the work and charged $1,900, which Travis paid. When Travis later complained about the quality of the work, M M did some touching up, but Travis was still dissatisfied. He demanded his $1,900 back, but M M refused to refund it because all of the work was "in" the car and Travis could not return it to the shop. The state of Nebraska, where this occurred, follows the majority rule on this issue. Does Travis get his money? Is this a fair result?
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Restitution in case of minor contract is explained below:
A minor can disaffirm a contract in case of consideration he has committed or received to extend in the contract deed. This restoring the other party to its original position is termed as restitution.
Decision regarding the case issue is explained below:
In this case, T is entitled to get his money from M. In certain states practicing the majority rule conveys that a minor is permitted to reserve a contract. And he can get the full refund of his money, even if he is incapable to make restitution. This is fair, because M can refuse a contract with a minor.

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Angela makes a material misstatement of fact to Lance, which he relies on when he signs Angela's contract. Fraud exists if Angela made the misstatement. (a) intentionally (b) recklessly (c) carelessly (d) a and b only (e) a, b, and c
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A makes a materially misstated contract to L who relies on it.
Material misstatement do not happens when a person made a minor misstatement but in case of a large difference between the calculated statement and actual statement. So, in L case A did make a misstatement which in second term is equal to fraud.
Therefore, the correct option is (a)

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Paula was alone, pregnant, and confused. She needed help and support, which she found at Methodist Mission Home of Texas. In the days following her child's birth, representatives of Methodist Mission forcefully told her that she had no moral or legal right to keep her child: She had to place her baby for adoption. Paula signed the adoption papers, but days later, she decided she wanted to keep the baby after all. Was there any ground to rescind?
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The case revolves around Mrs. P, who was alone, and pregnant and needed help and support. She got admitted in MM Home of Texas and in the days following her child's birth, representatives of MM urged her that she had no moral or legal right to keep the child.
She had no choice but to place her baby for adoption and hence, signed the adoption papers. However, later on, she changed her mind and wanted to keep the baby with her
In light of the above case, Mrs. P had already entered into a contract with MM Home of Texas and signed the adoption papers under their influence. In such a case, she cannot breach the contract.
If she changes her mind and breaches the contract, then she may face serious legal action or would be asked to pay damages.

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The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness throughout. They repaired the buckling wall by installing I-beams to support it. They never resolved the leaks and the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. They stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000. Soon afterward, they began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages? Why or why not?
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Veronica has a beer and then makes a contract. She continues drinking, and her blood alcohol level eventually rises to.09, which is just above her state's threshold for drunk driving. She makes a second contract while in this condition. Veronica's first contract is , and her second contract is. (a) valid; valid (b) valid; voidable (c) voidable; voidable (d) voidable; void
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Raymond Barrows owned a 17-acre parcel of undeveloped land in Seaford, Delaware. For most of his life, Mr. Barrows had been an astute and successful businessman, but by the time he was 85 years old, he had been diagnosed as "very senile and confused 90 percent of the time." Glenn Bowen offered to buy the land. Barrows had no idea of its value, so Bowen had it appraised by a friend, who said it was worth $50,000. Bowen drew up a contract, which Barrows signed. In the contract, Barrows agreed to sell the land for $45,000, of which Bowen would pay $100 at the time of closing; the remaining $44,900 was due whenever Bowen developed the land and sold it. There was no time limit on Bowen's right to develop the land nor any interest due on the second payment. Comment.
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Ball-Mart, a baseball card store, had a 1968 Nolan Ryan rookie card in almost perfect condition for sale. Any baseball collector would have known that the card was worth at least $1,000; the published monthly price guide listed its market value at $1,200. Bryan was a twelve-year-old boy with a collection of over 40,000 baseball cards. When Bryan went to Ball-Mart, Kathleen, who knew nothing about cards, was filling in for the owner. The Ryan card was marked "1200," so Bryan asked Kathleen if this meant twelve dollars. She said yes and sold it to him for that amount. When Ball-Mart's owner realized the mix-up, he sued to rescind the contract. Who wins?
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Kerry finds a big green ring in the street. She shows it to Leroy, who says, "Wow. That could be valuable." Neither Kerry nor Leroy knows what the ring is made of or whether it is valuable. Kerry sells the ring to Leroy for $100, saying, "Don't come griping if it turns out to be worth two dollars." Leroy takes the ring to a jeweler, who tells him it is an unusually perfect emerald, worth at least $75,000. Kerry sues to rescind. (a) Kerry will win based on fraud. (b) Kerry will win based on mutual mistake. (c) Kerry will win based on unilateral mistake. (d) Kerry will lose.
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On television and in magazines, Maurine and Mamie Mason saw numerous advertisements for Chrysler Fifth Avenue automobiles. The ads described the car as "luxurious," "quality-engineered," and "reliable." When they went to inspect the car, the salesman told them the warranty was "the best … comparable to Cadillacs and Lincolns." After the Masons bought a Fifth Avenue, they began to have many problems with it. Even after numerous repairs, the car was unsatisfactory and required more work. The Masons sued, seeking to rescind the contract based on the ads and the dealer's statement. Will they win?
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Contract law gives minors substantial legal protection. But does a modern high school student need so much protection? Older teens may have been naive in the 1700s, but today, they are quite savvy. Should the law change so that only younger children-perhaps those aged 14 and under-have the ability to undo agreements? Or is the law reasonable the way it currently exists?
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Do you have sympathy for intoxicated people who make agreements? Should the law ever let them back out of deals when they sober up? After all, no one forced them to get drunk. Should the law be more lenient, or is it reasonable as it currently exists?
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Scarborough's Department Store opens for business on a busy shopping day just before Christmas. A hurried clerk places a sign in the middle of a table piled high with red cashmere sweaters. The sign reads, "SALE-100% Cashmere-$0.99 Each." The sign, of course, was supposed to read "$99 each." This is a mistake, and customers be able to demand that Scarborough's sell the sweaters for 99 cents. (a) unilateral; will (b) unilateral; will not (c) mutual; will (d) mutual; will not
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Morell bought a security guard business from Conley, including the property on which the business was located. Neither party knew that underground storage tanks were leaking and contaminating the property. After the sale, Morell discovered the tanks and sought to rescind the contract. Should he be allowed to do so?
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When Steven Simkin and Laura Blank divorced in 2006, they agreed to split their $13.5 million fortune evenly. Two years later, it became evident that Simkin had a problem: His half was invested in Bernard Madoff's giant Ponzi scheme and he lost millions. Simkin asked Blank to revise their deal and she refused, so he sued to rescind their 2006 settlement based on mutual mistake of fact. He argued that the fatal mistake was that neither party knew that his half was invested in a fraud. Should a court invalidate the settlement for this mistake?
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Jerry is so mentally ill that he is unable to understand the nature and consequences of his transactions, but he has not been adjudicated insane. Penny has been adjudicated insane, and has a court-appointed a guardian. Jerry's contracts are , and Penny's contracts are. (a) valid; valid (b) valid; voidable (c) valid; void (d) voidable; voidable (e) voidable; void
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Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford. A few months later, the truck developed transmission problems. Newburn learned that the truck had 170,000 more miles on it than the odometer indicated. The company admitted the mileage error and promised to install a new transmission for free. Treadwell did install the new transmission, but when Newburn came to pick up the truck, Treadwell demanded that he sign a general release absolving the dealership of any claims based on the inaccurate mileage. Treadwell refused to turn over the truck until Newburn finally signed. The truck broke down again, and delays cost Newburn so much income that he fell behind on his loan payments and lost the truck. He sued Treadwell, which defended based on the release. Is the release valid?
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