Sam Is Mentally Incompetent but Has Not Been Adjudged by a Court

question 11

Multiple Choice

Sam is mentally incompetent but has not been adjudged by a court to be incompetent. Sam enters into a contract with Tony for the cleaning and maintenance of Uptown Office building. Most likely, the contract is

• A) voidable if Sam did not comprehend the consequences.
• B) enforceable if Tony did not know that Sam was mentally incompetent.
• C) enforceable if Sam is the owner of the building.
• D) void.

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Definitions:

Unfavourable Variance

A financial metric indicating that actual costs were higher or revenues were lower than the planned or standard amounts.

Productive Capacity

The maximum output a system, entity, or project can produce under normal conditions over a particular period.

Fixed Overheads

Fixed overheads are recurring business expenses that do not fluctuate with production volume, such as rent, salaries, and utility costs, essential for operational management.

Level of Activity

Level of activity refers to the volume of work or production achieved in a specific period, often influencing costs and operational planning.