Whenever a Firm Borrows Money, It Is Using Financial Leverage

question 13

True/False

Whenever a firm borrows money, it is using financial leverage.

Understand the concept of contractual capacity and its implications for contracts involving minors, insane persons, and intoxicated individuals.

Recognize the conditions under which contracts can be void, voidable, or ratified.

Identify the legal mechanisms available for the protection of minors in contracts, including disaffirmance and ratification.

Understand the doctrine of necessaries and its application to contracts involving minors and mental incompetents.

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Definitions:

Tort

A civil wrong or breach of duty to another person, as defined by law, that results in harm or injury, leading to legal liability.

Misdemeanor

A lesser crime than a felony, punishable by a fine and/or county jail time for up to one year.

Public Intoxication

A legal offense involving being visibly drunk or under the influence of drugs in a public space.

Defendant

The party sued in a civil lawsuit or the party charged with a crime in a criminal prosecution.