Bar Exam (Uniform) Quiz: Incapacity Defense

20 questions · exam conditions

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Incapacity DefenseQuestion 1 of 20

A 17-year-old aspiring actor signed a one-year contract with a talent agent. The contract required the actor to pay the agent 15% of all earnings. The actor turned 18 on May 1. On June 1, the agent secured a lucrative role for the actor in a television show. The actor accepted the role and worked on the show for three months, during which the agent was paid her 15% commission directly by the production company. Four months after turning 18, the actor had a disagreement with the agent and sent a letter disaffirming the agency contract.

Can the actor successfully disaffirm the contract? Select one.

Yes, because he disaffirmed within a reasonable time after reaching the age of majority.

Yes, because an agency contract entered into by a minor is void from the beginning.

No, because contracts for personal services that have been fully performed cannot be disaffirmed.

No, because by accepting the role secured by the agent after he turned 18, he ratified the contract.

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Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Incapacity Defense

Practice Incapacity Defense in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Incapacity Defense, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Can the actor successfully disaffirm the contract? Select one.

Yes, because he disaffirmed within a reasonable time after reaching the age of majority.
Yes, because an agency contract entered into by a minor is void from the beginning.
No, because contracts for personal services that have been fully performed cannot be disaffirmed.
No, because by accepting the role secured by the agent after he turned 18, he ratified the contract. (correct answer)

Explanation: When you encounter contract questions involving minors, focus on the key principles: minors can disaffirm contracts, but they can also ratify them upon reaching majority through words or conduct. The correct answer is D because the actor ratified the contract through his conduct after turning 18. Ratification occurs when a minor, after reaching the age of majority, affirms the contract either expressly or through actions that show acceptance of its terms. Here, the actor turned 18 on May 1, then on June 1 accepted a role secured by his agent and worked for three months while the agent received her 15% commission. By knowingly accepting the benefits of the agency relationship after becoming an adult, he ratified the entire contract and lost his right to disaffirm. Answer A is incorrect because while the actor did disaffirm within a reasonable time, ratification had already occurred through his conduct, which eliminates the right to disaffirm. Answer B mischaracterizes the law—contracts entered into by minors are typically voidable (not void), meaning the minor can choose to disaffirm or ratify them. Answer C incorrectly suggests that full performance prevents disaffirmance; generally, minors can disaffirm contracts even after performance, unless ratification has occurred. Remember this key distinction: on bar exam questions about minors' contracts, look carefully at what the former minor does after reaching majority. Actions that show acceptance of the contract's benefits typically constitute ratification, which permanently eliminates the right to disaffirm—even if disaffirmance comes later.

Question 2

A 17-year-old, a talented graphic designer, signed a contract with a marketing firm to design a logo for a new product. The contract provided for a payment of $3,000. She presented the firm with a professionally made fake ID showing she was 22. The firm was impressed with her portfolio and had no reason to doubt her age. After delivering the logo, which the firm immediately used in its marketing campaign, the designer turned 18. A week later, she sent a letter to the firm disaffirming the contract and demanding to be paid $5,000, which she claimed was the reasonable value of her services.

The firm has refused to pay more than the contract price of $3,000. What is the likely legal consequence of the designer's misrepresentation of age? Select one.

The designer is estopped from disaffirming the contract because of her fraudulent misrepresentation.
The designer may still disaffirm the contract, but she may be liable to the firm for the tort of misrepresentation. (correct answer)
The designer's misrepresentation of age automatically ratifies the contract upon her reaching the age of majority.
The designer can disaffirm the contract and is entitled to the reasonable value of her services without any offset for the firm's damages.

Explanation: The correct answer is B. The majority rule is that a minor's misrepresentation of age does not prevent them from disaffirming a contract. However, the other party is not without a remedy. Many courts will hold the minor liable for damages in tort for their fraudulent misrepresentation, or they may allow the firm to use the misrepresentation as a defense against the disaffirmance to the extent of its reliance. Thus, while the designer can likely still disaffirm, she may be liable for the firm's damages. Distractor A represents a minority view; most courts do not estop a minor from disaffirming due to fraud. Distractor C is incorrect; ratification requires an act of affirmation after reaching majority, not an act of fraud before. Distractor D is incorrect because the court will likely allow the firm to offset its damages from the designer's tortious conduct against any recovery she might be owed.

Question 3

An elderly woman with moderate dementia sold her home to a neighbor for a price significantly below market value. The woman was not under a guardianship. The neighbor knew the woman was becoming forgetful but did not believe she was incompetent. The neighbor recorded the deed. Six months later, the woman's son discovered the transaction and filed suit on her behalf to rescind the sale, alleging lack of capacity. The neighbor argues that even if the woman lacked capacity, the contract cannot be voided because he was a good faith purchaser without notice of severe incapacity and the contract has been fully performed.

Assuming the court finds the woman lacked capacity to contract at the time of the sale, what is the likely outcome? Select one.

The sale will be rescinded, provided the woman can return the purchase price to the neighbor. (correct answer)
The sale will not be rescinded because the neighbor was a good faith purchaser for value.
The sale will not be rescinded, but the court may reform the contract to reflect a fair market price.
The sale will be declared void ab initio due to the woman's incapacity.

Explanation: The correct answer is A. A contract made by a person who is mentally incompetent (but not adjudicated as such) is voidable by that person or their representative. If the other party was unaware of the incompetence and the contract is on fair terms, some courts will not allow rescission if it would be unjust to the other party, especially if the contract has been performed. However, here the price was significantly below market value, making the terms unfair. In such a case, the court will allow the incompetent party to rescind the contract (void the sale) as long as she can make restitution by returning the consideration she received (the purchase price). Distractor B is incorrect because the good faith status of the purchaser does not prevent rescission when the contract terms are unfair and the incompetent party can make restitution. Distractor C is incorrect; reformation is a remedy to correct a writing to reflect the parties' true agreement, not to impose a fair price on a contract voidable for incapacity. Distractor D is incorrect; the contract is voidable, not void, because there was no prior adjudication of incompetence.

Question 4

A 17-year-old, who lived with his parents in a suburban area with limited public transportation, purchased a used car from a dealership for $8,000. The teenager needed the car to commute to a part-time job located 15 miles from his home, which was his only source of income. Two months after his 18th birthday, the car's transmission failed. The teenager immediately towed the car back to the dealership and delivered a letter stating that he was disaffirming the contract and demanding a full refund of the purchase price.

The dealership has refused the refund, claiming the contract was for a necessary. In a suit by the teenager to recover the $8,000, what is the most likely outcome? Select one.

The teenager will recover the full $8,000, because a minor may disaffirm a contract within a reasonable time after reaching the age of majority. (correct answer)
The teenager will recover nothing, because he ratified the contract by using the car for two months after his 18th birthday and failing to disaffirm promptly.
The teenager will recover the $8,000 less the reasonable rental value of the car for the time he used it, because the car was a necessary under the circumstances.
The teenager will recover nothing, because the car was a necessary for his employment, making the contract fully enforceable against him despite his minority.

Explanation: The correct answer is A. A contract entered into by a minor is voidable at the minor's option. The minor can disaffirm the contract during their minority or within a reasonable time after reaching the age of majority. Here, the teenager disaffirmed two months after turning 18, which is likely a reasonable time. While the dealership argues the car was a necessary, the doctrine of necessaries does not make the contract fully enforceable. It merely allows the seller to recover the reasonable value of the goods or services, not the contract price. However, many courts hold that a car is not a necessary if the minor has other means of support (like living with parents), even if it's used for work. Given that the primary remedy for a valid disaffirmance is rescission, the teenager is entitled to return the car (in its current condition) and recover his payment. Distractor B is incorrect because mere continued use for a short period, followed by prompt disaffirmance upon a major problem, is unlikely to be deemed ratification by conduct. Distractor C incorrectly states the remedy; if the car were a necessary, the dealership could recover its reasonable value, but the teenager would still be disaffirming the contract price. Distractor D is incorrect because the necessaries doctrine does not make a contract fully enforceable at the contract price.

Question 5

A 16-year-old musician purchased a vintage guitar for $3,000 from an adult collector, paying in cash. A month later, the musician sold the same guitar to a friend for $3,200. The friend was unaware that the musician was a minor. After spending the $3,200, the musician decided he wanted the guitar back. He contacted the original adult collector, disaffirmed the initial purchase contract, and demanded that the collector return the guitar to him.

Assuming the friend will not voluntarily return the guitar, what is the musician's legal position with respect to the original collector? Select one.

The musician can recover the guitar from the collector because his original contract was voidable.
The musician can recover the $3,000 he paid from the collector, but the collector has no duty to help recover the guitar.
The musician cannot disaffirm his contract with the collector because he has already transferred the guitar to a third party. (correct answer)
The musician must first recover the guitar from his friend before he can disaffirm the original contract with the collector.

Explanation: The correct answer is C. A minor's right to disaffirm a contract is conditioned on making restitution of any consideration received that the minor still possesses. By selling the guitar to his friend, the musician has put the consideration (the guitar) out of his possession. This act of selling the property is often treated as a ratification of the original contract, because it is an act inconsistent with disaffirmance. He cannot both keep the proceeds of the sale and disaffirm the purchase. Therefore, he has lost his right to disaffirm the contract with the original collector. Distractor A is incorrect because the collector no longer has the guitar and the musician has ratified the contract by his subsequent sale. Distractor B is incorrect because he cannot get his money back if he has ratified the contract. Distractor D is incorrect; the sequence of events has resulted in ratification, making the original contract binding.

Question 6

A 16-year-old purchased a motorcycle from a private seller for $4,000. The teenager was reckless and crashed the motorcycle a week later, causing significant damage that reduced its value to $500. The teenager then contacted the seller, disaffirmed the contract, and offered to return the wrecked motorcycle in exchange for his $4,000. The seller refused, arguing that he should not have to bear the loss from the teenager's recklessness.

In a lawsuit by the teenager to recover the $4,000, what is the majority rule regarding the teenager's duty of restitution? Select one.

The teenager must restore the seller to the financial position he was in before the contract, and thus is not entitled to any refund.
The teenager is entitled to a full refund but must pay the seller damages for the depreciation caused by his recklessness.
The teenager is entitled to a full refund upon returning the motorcycle in its current damaged condition. (correct answer)
The teenager can only recover the present value of the motorcycle, which is $500.

Explanation: The correct answer is C. Under the majority rule, a minor who disaffirms a contract is only required to return the consideration they received, to the extent they still possess it, regardless of its condition. The minor is not liable for depreciation, wear and tear, or even damage caused by their own negligence. Therefore, the teenager is entitled to recover the full purchase price upon returning the wrecked motorcycle. Distractor A represents the duty of restoration, which is not what is typically required of a disaffirming minor. Distractor B is incorrect; courts generally do not hold the minor liable for damages or depreciation, as this would undermine the policy of protecting minors. Distractor D is incorrect; the minor is entitled to a return of the price they paid, not the current value of the goods they are returning.

Question 7

A 20-year-old woman was involuntarily committed to a psychiatric facility for 72 hours after an acute psychotic episode. During this time, she was heavily medicated. While still in the facility, she used her phone to agree to sell a valuable painting she owned to an art collector who was communicating with her via text message. The collector was unaware she was in a facility. Upon her release and once the medication's effects had subsided, she immediately sought to cancel the sale.

The woman's best argument for voiding the contract is that she lacked capacity due to: Select one.

Legal adjudication, because she was involuntarily committed.
Mental illness, because she had an acute psychotic episode.
Infancy, because she is under the age of 21.
Intoxication, because she was under the influence of prescribed medication. (correct answer)

Explanation: Contract law requires parties to have the mental capacity to understand the nature and consequences of their agreement. When analyzing capacity challenges, you need to identify which specific legal theory applies to the facts. The woman's strongest argument is intoxication from prescribed medication (D). Legal intoxication occurs when someone's mental faculties are so impaired by substances that they cannot understand the transaction's nature and consequences. Here, she was "heavily medicated" during her psychiatric hold and immediately sought to cancel the sale once the medication's effects subsided. This timeline strongly suggests the medication impaired her decision-making capacity during the contract formation. Option A is incorrect because involuntary commitment alone doesn't automatically void contracts. The commitment itself isn't a legal adjudication of incompetence - it's a temporary psychiatric hold. She would need a separate judicial determination of incompetence. Option B fails because having a mental illness doesn't automatically negate capacity. The law requires proof that the specific illness prevented understanding of the particular transaction, which is harder to establish than medication-induced impairment. Option C is wrong on basic contract law - the age of majority is 18, not 21, so she's legally an adult. Remember that capacity challenges require connecting the impairment to the specific moment of contract formation. Intoxication (whether from alcohol or medication) often provides the clearest timeline and causation link, especially when the person's behavior changes dramatically once the substance's effects wear off. Look for facts showing impairment during signing and recovery afterward.

Question 8

Your client is a landlord who leased an apartment to a 19-year-old college student. Six months into the one-year lease, the student was in a serious car accident that resulted in a traumatic brain injury. His doctors have provided a report stating that he is now cognitively unable to understand his legal or financial obligations. A guardian was appointed for the student. The guardian has sent your client a letter stating that the lease is terminated due to the student's incapacity and that the student will be vacating the apartment.

What is the legal effect of the student's incapacity on the existing lease? Select one.

The lease is automatically terminated by operation of law due to the student's supervening incapacity.
The student's guardian has the power to disaffirm the remainder of the lease because of the student's incapacity.
The lease remains fully valid because the student had capacity at the time the contract was formed. (correct answer)
The lease is rendered void, and your client must return all rent paid since the date of the accident.

Explanation: The correct answer is C. Contractual capacity is determined at the time the contract is made. Because the student was 19 and presumably had capacity when he signed the lease, the contract is valid. Supervening, or subsequent, incapacity does not make a validly formed contract voidable. The obligations under the lease continue, and the student's guardian will be responsible for managing his estate to meet those obligations (e.g., by paying rent or negotiating a termination). Distractor A is incorrect; supervening incapacity is not a recognized basis for automatic termination, unlike impossibility or frustration of purpose, which would not apply here. Distractor B is incorrect because the power to disaffirm for incapacity applies only if the incapacity existed at the time of formation. Distractor D is incorrect because the contract is not rendered void.

Question 9

A 17-year-old, who lived with wealthy parents and received a generous allowance, was also an emancipated minor under state law because she was married. She signed a one-year lease for a luxury apartment for $3,000 per month. After three months, she and her spouse divorced, and she moved back in with her parents. She notified the landlord that she was disaffirming the lease due to her age. The landlord has sued for the remainder of the rent due under the lease.

Which of the following statements is the most accurate analysis of the former tenant's defense of infancy? Select one.

Her emancipation due to marriage means she had the full legal capacity to contract, making the lease enforceable.
She can disaffirm the lease because emancipation does not automatically grant a minor the capacity to contract. (correct answer)
She cannot disaffirm the lease because housing is a necessary, and she is liable for the full contract rent.
She can disaffirm the lease, but only if she can show that her parents were willing to house her when she signed it.

Explanation: The correct answer is B. In most jurisdictions, emancipation does not remove a minor's incapacity to contract. The right to disaffirm remains. Emancipation may be relevant to the analysis of what constitutes a necessary, but it does not grant full contractual capacity. Therefore, she retains the power to disaffirm the lease. Distractor A is incorrect because it states the minority rule; most states hold that emancipation does not affect contract capacity. Distractor C is incorrect because while housing is a necessary, an incapacitated person is liable only for the reasonable rental value, not the full contract rent, especially for a luxury apartment. Distractor D is incorrect because her ability to disaffirm is not contingent on her parents' willingness to house her at the time of signing; the key is her status as a minor when she entered the contract.

Question 10

Assuming the friend will not voluntarily return the guitar, what is the musician's legal position with respect to the original collector? Select one.

The musician can recover the guitar from the collector because his original contract was voidable.
The musician can recover the $3,000 he paid from the collector, but the collector has no duty to help recover the guitar.
The musician cannot disaffirm his contract with the collector because he has already transferred the guitar to a third party. (correct answer)
The musician must first recover the guitar from his friend before he can disaffirm the original contract with the collector.

Question 11

What is the legal effect of the student's incapacity on the existing lease? Select one.

The lease is automatically terminated by operation of law due to the student's supervening incapacity.
The student's guardian has the power to disaffirm the remainder of the lease because of the student's incapacity.
The lease remains fully valid because the student had capacity at the time the contract was formed. (correct answer)
The lease is rendered void, and your client must return all rent paid since the date of the accident.

Question 12

Your client, a 17-year-old high school student, signed a one-year contract for a premium membership at a local rock-climbing gym for $100 per month. The contract includes a clause stating that the membership is non-cancelable for the one-year term. After using the gym for two months and paying $200, your client decided it was too expensive and wants to cancel. The gym's owner has pointed to the non-cancelable clause and is threatening to sue for the remaining $1,000.

What is the best advice to give your client regarding her legal obligations? Select one.

She is bound by the contract because the non-cancelable clause is prominent and was agreed to.
She can disaffirm the contract but will forfeit the $200 she has already paid to the gym.
She can disaffirm the contract, cease making payments, and is entitled to a refund of the $200 she paid. (correct answer)
She can only disaffirm the contract if she can prove that the gym membership was not a necessary.

Explanation: The correct answer is C. As a minor, your client has the right to disaffirm the contract. This right applies to the entire contract, including the non-cancelable clause. A rock-climbing gym membership is not a necessary. Upon disaffirmance, the contract is rescinded. The general rule is that the minor is entitled to a full refund of all payments made under the contract, and in turn, must return any consideration received (which in this case, is nothing tangible). Distractor A is incorrect because a minor's right to disaffirm overrides contractual clauses. Distractor B is incorrect because upon disaffirmance, the minor is typically entitled to a full refund of payments. Distractor D frames the issue backward; the gym would have the burden of proving the membership was a necessary to recover its reasonable value, but the client's right to disaffirm the contract itself is absolute, regardless of whether the item is a necessary or not. The necessaries doctrine is a limit on the minor's ability to escape all liability, not a precondition for disaffirmance.

Question 13

On her 17th birthday, a teenager purchased a high-end gaming laptop for $2,500 on credit from an electronics store. She used the laptop extensively for gaming and schoolwork. She made regular monthly payments until she turned 18. After her 18th birthday, she continued to use the laptop daily and made three more monthly payments according to the credit agreement. Four months after her 18th birthday, she lost her part-time job and decided she could no longer afford the payments. She notified the store that she was disaffirming the contract and ceased making payments.

The store sued the teenager for the remaining balance. Which of the following is the store's strongest argument for enforcing the contract? Select one.

The teenager's partial performance of the contract before turning 18 made the contract irrevocable.
The laptop constituted a necessary because it was used for schoolwork.
The teenager ratified the contract by her actions after reaching the age of majority. (correct answer)
The teenager cannot disaffirm the contract without returning the laptop in its original condition.

Explanation: The correct answer is C. A minor can ratify a contract after reaching the age of majority, making it fully enforceable. Ratification can occur through express words or by conduct that indicates an intention to be bound. By continuing to use the laptop and, more importantly, making payments for three months after turning 18, the teenager engaged in conduct that manifested an intent to affirm the contract. This is the store's strongest argument. Distractor A is incorrect because a minor's performance does not prevent them from disaffirming. Distractor B is weak; while used for school, a $2,500 high-end gaming laptop is unlikely to be deemed a necessary, especially when cheaper alternatives exist. The primary purpose was gaming. Distractor D misstates the law of restitution; upon disaffirmance, a minor generally must return the consideration they received, but only in its condition at the time of disaffirmance. They are not liable for depreciation or damage.

Question 14

At a trade convention, a company president celebrated a successful day by drinking heavily at the hotel bar. While visibly intoxicated, she agreed to a long-term supply contract with a competitor. The competitor knew she was drunk but pushed to finalize the deal, which contained terms unfavorable to her company. The next morning, her assistant reviewed the signed agreement and, unaware of the circumstances of the signing, sent an email to the competitor stating, "We confirm receipt of the executed supply contract and are excited to begin our partnership." A week later, the president learned of the email and, now fully sober and aware of the unfavorable terms, sought to void the contract.

What is the legal effect of the assistant's email? Select one.

It has no effect because the assistant lacked the authority to ratify a contract.
It ratified the contract, making it fully enforceable against the company. (correct answer)
It is ineffective as a ratification because the president had not yet become sober and aware of the contract's existence.
It is evidence of ratification but is not conclusive if the president acts promptly to disaffirm upon learning the facts.

Explanation: The correct answer is B. A contract entered into while intoxicated is voidable. However, it can be ratified once the person is sober. Ratification can be done by an authorized agent. The president's assistant, acting within the scope of their duties, sent an email confirming the agreement. This action, taken by an agent of the company while the principal (the company) was no longer under the disability (as the president's intoxication was temporary), serves as an express ratification of the contract. The ratification binds the company. Distractor A is incorrect because a corporate president's assistant likely has apparent or actual authority to send such confirmations. Distractor C is incorrect because the ratifying party is the company, acting through its agent. The president's personal state of mind at the moment the assistant sent the email is not the key issue; the issue is whether the agent acted with authority on behalf of the sober entity. Distractor D is incorrect because the assistant's email is a clear, express act of affirmation on behalf of the company, which likely makes the ratification conclusive.

Question 15

You are representing a client who attended a high-pressure sales presentation for a resort timeshare. Your client has a diagnosed gambling addiction and impulse-control disorder. During the presentation, he became agitated and bought a $30,000 timeshare package he could not afford. The salesperson noted your client's extreme excitement and restlessness, and even commented, "You seem like a guy who lives for the thrill!" Your client understood the terms of the deal but felt an irresistible compulsion to make the purchase. He now wants to void the contract.

What is your client's best argument for voiding the contract based on incapacity? Select one.

He was unable to understand the nature of the transaction due to his disorder.
He was unable to act in a reasonable manner, and the salesperson had reason to know of his condition. (correct answer)
The high-pressure sales tactics constituted undue influence, rendering the contract void.
The contract is unconscionable because it was sold to a person with a known impulse-control disorder.

Explanation: The correct answer is B. This scenario points to the volitional test for mental incapacity, which is recognized in many jurisdictions. Under this test, a contract is voidable if (1) a party is unable to act in a reasonable manner in relation to the transaction, and (2) the other party has reason to know of this condition. The client's irresistible compulsion addresses the first prong, and the salesperson's observations of his agitation and excitement, coupled with the manipulative comment, provide evidence for the second prong. Distractor A is incorrect because the facts state the client understood the terms, which means the cognitive test for incapacity is not met. Distractor C is incorrect because while there may be an argument for undue influence, the question asks for the best argument based on incapacity. Furthermore, undue influence typically requires a special relationship of trust or dominance, which isn't present here. Distractor D relates to unconscionability, which is a different contract defense focused on oppressive terms and unfair surprise, not the party's mental state.

Question 16

Can the actor successfully disaffirm the contract? Select one.

Yes, because he disaffirmed within a reasonable time after reaching the age of majority.
Yes, because an agency contract entered into by a minor is void from the beginning.
No, because contracts for personal services that have been fully performed cannot be disaffirmed.
No, because by accepting the role secured by the agent after he turned 18, he ratified the contract. (correct answer)

Question 17

The dealership has refused the refund, claiming the contract was for a necessary. In a suit by the teenager to recover the $8,000, what is the most likely outcome? Select one.

The teenager will recover the full $8,000, because a minor may disaffirm a contract within a reasonable time after reaching the age of majority. (correct answer)
The teenager will recover nothing, because he ratified the contract by using the car for two months after his 18th birthday and failing to disaffirm promptly.
The teenager will recover the $8,000 less the reasonable rental value of the car for the time he used it, because the car was a necessary under the circumstances.
The teenager will recover nothing, because the car was a necessary for his employment, making the contract fully enforceable against him despite his minority.

Question 18

A 78-year-old woman, who had been formally adjudicated incompetent by a court and had a guardian appointed to manage her affairs, walked out of her assisted living facility. She went to a nearby art gallery and purchased a sculpture for $10,000, paying with a check from an old checkbook. The gallery owner was unaware of her incompetence or guardianship. When the woman's guardian learned of the transaction, the guardian immediately stopped payment on the check and sought to return the sculpture.

In a suit by the gallery to enforce the contract, what is the legal status of the purchase agreement? Select one.

The contract is voidable at the option of the woman's guardian.
The contract is void because the woman had been adjudicated incompetent. (correct answer)
The contract is enforceable because the gallery owner was unaware of the woman's condition.
The contract is enforceable up to the reasonable value of the sculpture if it is deemed a necessary.

Explanation: The correct answer is B. Once a person is formally adjudicated incompetent and a guardian is appointed, their contracts are void, not merely voidable. The court's determination of incompetence serves as public notice, and the individual legally lacks the capacity to contract. The other party's knowledge or lack thereof is irrelevant. Therefore, the purchase agreement is a legal nullity. Distractor A is incorrect because contracts of those adjudicated incompetent are void, whereas contracts of those who are mentally incompetent but not adjudicated are voidable. Distractor C is incorrect because the good faith of the other party cannot validate a void contract. Distractor D is incorrect because the necessaries doctrine applies to voidable contracts to allow recovery for reasonable value, but it does not apply here where the contract is void from its inception. Furthermore, a $10,000 sculpture is not a necessary.

Question 19

The firm has refused to pay more than the contract price of $3,000. What is the likely legal consequence of the designer's misrepresentation of age? Select one.

The designer is estopped from disaffirming the contract because of her fraudulent misrepresentation.
The designer may still disaffirm the contract, but she may be liable to the firm for the tort of misrepresentation. (correct answer)
The designer's misrepresentation of age automatically ratifies the contract upon her reaching the age of majority.
The designer can disaffirm the contract and is entitled to the reasonable value of her services without any offset for the firm's damages.

Question 20

An elderly man with diagnosed dementia, but not under a guardianship, lived alone. He hired a home healthcare service to provide a caregiver for 20 hours per week, which was necessary for his health and safety. The contract rate was $40 per hour. After two months, the man's daughter was appointed as his guardian. The daughter reviewed his finances and discovered the contract. She believes the market rate for such services is only $30 per hour. She immediately canceled the service and refused to pay the outstanding bill of $3,200 for the last month of service.

The healthcare service sued the man's estate for the unpaid bill. What is the service most likely to recover? Select one.

Nothing, because the daughter, as guardian, properly voided the contract.
The full contract amount of $3,200, because the services were provided in good faith.
The reasonable value of the services provided, which may be less than the contract price. (correct answer)
The full contract amount of $3,200, because the services were necessaries.

Explanation: The correct answer is C. The man's contract is likely voidable due to his mental incapacity. However, the home healthcare services were necessaries, essential for his health and safety. Under the doctrine of necessaries, a party who lacks capacity is liable for the reasonable value (quantum meruit) of necessary goods or services, not the contract price. Therefore, while the guardian can disaffirm the contract price of $40/hour, the service can recover the reasonable value of its services, which the daughter argues is $30/hour. The court would determine the reasonable value. Distractor A is incorrect because the necessaries doctrine creates a quasi-contractual liability. Distractor B is incorrect because recovery is limited to reasonable value, not the contract price. Distractor D is close but legally imprecise; the fact that the services were necessaries makes the estate liable for their reasonable value, not necessarily the full contract amount.