In the First State Bank of Sinai V

question 57

Multiple Choice

In the First State Bank of Sinai v. Hyland case, the Supreme Court of South Dakota held:

• A) Mervin's obligation on a promissory note was void due to his alcohol-related incapacity.
• B) Mervin ratified his voidable contract by conduct, making it a fully valid legal obligation.
• C) the alcohol intoxication of a party to a contract does not affect the contract's enforceability.
• D) Mervin could only use express language to ratify a contract formed while he was incapacitated by alcohol use.

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Definitions:

Creditor

An individual, company, or institution that lends money or extends credit to another party, expecting to be repaid in the future.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Borrower

An individual or entity that receives funds from a lender under the condition of returning it over time, with interest.

Lender

An individual, a financial institution or another entity that provides funds to others with the expectation that the funds will be repaid, typically with interest.