Pat Is a Rich Boy Whose Parents Supply Him with Every

question 72

Multiple Choice

Pat is a rich boy whose parents supply him with every conceivable necessity of life.While still a minor,Pat buys a coat on credit from a men's store for $5,000.After wearing the coat for a while,Pat decides that it bores him and that he would like to disaffirm.Which of the following is most likely to be true? Assume that Pat is still a minor.

• A)Pat can disaffirm the contract,and he must return the coat.
• B)Pat cannot disaffirm the contract,but he is liable only for the reasonable value of the coat.
• C)Pat cannot disaffirm the contract,and he is liable for the full price of the coat ($5,000).
• D)Pat can disaffirm the contract,but the store will sue him for deceit.

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Definitions:

Ultra Vires Rule

A legal doctrine that acts performed beyond the scope of a corporation's or entity's powers are invalid.

Business Judgment Rule

A legal principle that protects the decisions made by a corporation's board of directors from being challenged in court, provided they were made in good faith and with reasonable care.

Oppression

The exercise of authority or power in a burdensome, cruel, or unjust manner.

Novation

is the process of substituting a new obligation or contract for an old one, with consent from all parties involved.