Chapter15

Capacity is the legal ability of a party to enter into a _

contract

A person may lack capacity because of _ or mental infirmity

youth

A contract is _ when the injured party may choose to terminate it

voidable

A minor is someone under the age of _

18

A voidable contract may be canceled only by the party who lacks _

capacity

To disaffirm means to give notice of refusal to be _ by an agreement

bound

To rescind means to _ a contract

cancel

A minor who disaffirms must return the _ he has received, to the extent possible

consideration

Restitution means restoring the other party to its original _

position

Once a minor _ after turning 18, they can no longer disaffirm

ratifies

A necessary is something essential to the minor’s life and _

welfare

If a minor misrepresents their _, some states allow disaffirmance and some do not

age

A party with a mental impairment who cannot understand the contract creates only a _ contract

voidable

If a person has been adjudicated incompetent, all future agreements are _

void

Adjudication of incompetence is a court’s declaration that a person cannot manage their _

affairs

A contract is voidable if one party is so _ they cannot understand the nature and consequences of the transaction

intoxicated

Fraud begins when a party represents something that is factually _

wrong

A statement is puffery when a reasonable person realizes it is a _ pitch

sales

A false statement is material if it would likely influence the decision of the _ party

misled

In fraud, the injured party may either rescind the contract or sue for _

damages

Innocent misrepresentation allows for _ but not damages

rescission

Nondisclosure is required when it corrects a previous _

assertion

A seller must disclose any _ defect they know about

latent

A relationship of trust requires one party to act with openness and _

honesty

A unilateral mistake occurs when only _ party is mistaken

one

A mutual mistake occurs when _ parties share the same mistake

both

Duress is an improper _ made to force another party into a contract

threat

Economic duress may exist when there is an unnaturally large _ for one party

gain

Undue influence involves a relationship of trust or domination and improper _

persuasion