Multiple choice

1. Jack is a very mature looking seventeen-year-old who lives at home with his parents. Jack wants to purchase an automobile. Jack goes to Discount Car Sales where Bud, the car salesman, never considers that Jack may be a minor because Jack looks at least twenty-five. Bud sells Jack a car, with the agreement that Jack will pay Bud $100 per month over the next five years for the car. Which one of the following is true? 

A. Despite Jack’s minor status, Bud can prohibit Jack from disaffirming a contract for a necessary (or basic need). 

B. Jack can disaffirm the contract because of his minor status at the time the contract was formed. 

C. Bud can disaffirm the contract because of Jack’s minor status at the time the contract was formed. 

D. Bud can hold Jack’s parents liable for Jack’s contract, because Jack was a minor living in their home at the time the contract was formed. 


2. Edward offers Austin one million dollars to break into the World Museum and steal a priceless Egyptian diamond. Austin readily accepts the offer. Both Edward and Austin have reached the age of majority and possess the capacity to contract. Which of the following requirements for the formation of a contract is missing? 

A. Legality 

B. Consideration

C. Contractual capacity

D. Agreement


3. Paul wants to buy an antique car from Betty. Paul believes that the car is worth $30,000, even though Betty is asking only $10,000 for the car. In actuality, the car is worth only $5,000. The result of this chain of events would be a 

A. mistake of fact. 

B. fraudulent misrepresentation.

C. mutual mistake.

D. mistake of value.


4. Jason contracts with Mountaintop Life Insurance to purchase life insurance. Jason lists his wife, Melba, as the beneficiary. Melba is a/an 

A. donee beneficiary. 

B. creditor beneficiary.

C. incidental beneficiary.

D. obligee. 


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