Marissa Prentice
Chapter 14 Case Problems
BUSLW 3253-01

Q1: The court should rule that the contract is voidable. If a person is not judged incompetent, any contract entered into by the person is voidable if the individual does not know he or she is entering into a contract or lacks the capacity to comprehend its subject matter, consequences, and nature. Capacity is the mental ability to make a rational decision. It must be shown that because of Frank’s affliction, he was incompetent at the time of the transaction. The attorney who obtained Frank’s signature claims that he was aware of what he was doing at the time the contract was being signed, but the nursing summaries indicated he was having lucid periods on that day. The contract can be voided if Norman can prove that his father was incompetent on the day he signed. Therefore, the court should rule that the contract is voidable.

Q2: Yes, the car dealer will succeed in his claim. Generally, a minor has the power to disaffirm most contracts he makes while a minor and for a reasonable time after reaching majority. However, a contract entered into by a minor can be ratified after the minor has reached the age of majority. Generally, an executed contract is ratified if the consideration is retained by the minor for an unreasonable time after the minor reaches the age of majority. Because Smith made 10 monthly payments on the vehicle after he reached the age of majority, it is reasonable to believe that he ratified the contract between Bobby Floars Toyota, Inc. and himself. Therefore, Bobby Floars should be successful in his claim that Smith ratified the