Chapter 21 Self-test questions

. Are contracts generally enforceable against minors?

Yes.

No.

. How may a contract become enforceable against a minor?

Contracts will automatically become enforceable against a minor when they reach the age of majority.

Contracts will only become enforceable against a minor if they ratify the agreement when they reach the age of majority.

Contracts will only be enforceable if the minor gives consideration for their agreement.

Contracts concluded with minors are never enforceable.

. How are contracts for 'necessaries' assessed?

Such contracts are assessed uniformly, all minors are judged to have identical necessaries.

The application of the principle regarding necessaries remains as it was when it was enacted in 1893.

The application of the principle regarding necessaries must vary with changing social conditions, taking into account the individual's actual requirements.

The application of the principle regarding necessaries must vary with changing social conditions, but differences between individuals do not matter.

. When may contracts be set aside at common law for mental incapacity?

Contracts will automatically be set aside at common law for mental incapacity.

Contracts may be set aside if the defendant knows of the claimant's incapacity.

Contracts will only be set aside if the contract has been made by deed.

Contracts will never be set aside at common law for mental incapacity.

. What is the correct presumption under the Mental Capacity Act 2005?

A person is presumed to lack capacity unless it is established that they have it.

A person is presumed to have capacity unless it is established that they lack it.

If certain criteria are met, a person will be presumed irrebuttably to lack capacity.

The 2005 Act does not provide for any relevant presumption.

. Under the Mental Capacity Act 2005, what must a person who lacks capacity pay a reasonable price for?

All goods and services.

Only goods.

Only services.

Necessary goods and services.

. Are companies capable of entering into contracts?

Yes.

No.

. What was the effect of section 39(1) of the Companies Act 2006 on the ultra vires rule to company contracts?

It expanded the ultra vires rule to all contracts concluded by the company.

It abolished the ultra vires rule outright.

It effectively abolished the rule where a third party contracts in good faith with a company.

It holds that the rule only exists as against third parties.

. Which of the following options limits the ability of a public authority to conclude contracts?

It is a legal person, not an 'everyday' person.

It cannot conclude contracts outside the scope of its powers.

It does not have a board of directors.

All of the options given are correct.

. How may contracting parties recover any benefits transferred under a contract which is void due to being ultra vires the public authority?

Through an action for breach of contract.

Through an action in tort.

Through an action in unjust enrichment.

Recovery is impossible.

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