Business Law - Ch. 5 & 6 Review

If a mentally impaired person enters into a contract,

• The reasonable time clause has no effect.

• He or she may not be bound to the contract.

• His or her contracts are usually valid.

• All his or her assets are frozen.

Ratification can only be accomplished

• when a business advertisement directly targets minors.

• when both parties of the contract agree.

• two weeks prior to the 18th birthday.

• upon a minor reaching the age of majority.

By permitting minors to have the privilege of disaffirming contracts, the law

• provides young people a second change when they use poor judgment.

• allows minors to keep any goods that were exchanged in the transaction.

• declares them emancipated.

• assumes all minors are immature and lack experience.

The age of majority is

• the day before a person's 18th birthday.

• when most states allow the purchase of alcoholic beverages.

• age 21 in most states.

• the day after a person's 18th birthday

A minor who marries and gives up all rights to parent support is considered

• abandoned

• disaffirmed

• emancipated

• ratified

The Statute of Frauds requires that

• the fraud is exposed to both the buyer and seller.

• the original contract be used as evidence in court.

• an agreement for price fixing be made public.

• certain contracts be in writing.

A contract is said to be divisible if

• certain promises and actions in the contract can be performed by themselves.

• it does not violate any statutory laws.

• all six elements that make up a valid contract are included.

• it contains at least isolated promises which can be performed independently.

The illegal action or practice of lending money at unreasonably high rates of interest.

• Civil statute

• Gambling statute

• Sunday statute

• Usury statute

An agreement to commit fraud is illegal due to this.

• Civil statute

• Gambling statute

• Sunday statute

• Usury statute

Some purchases, like buying a car or alcohol, are not permitted on a certain day of the week. Also called blue laws.

• Civil statute

• Gambling statute

• Sunday statute

• Usury statute