Which of the Following Is a Correct Statement Regarding the Test

question 18

Multiple Choice

Which of the following is a correct statement regarding the test of contractual incapacity?

• A) The test usually applied in contract law is whether a party, at the time the case is litigated, had sufficient mental capacity to understand the nature and effect of the contract.
• B) A person could be medically insane but still have the legal capacity to contract.
• C) A person who is senile cannot enter into a binding agreement.
• D) A person with less-than-ordinary intelligence cannot enter into a binding agreement.

---

Definitions:

Market Prices

The current value at which goods and services are bought and sold in the market, determined by supply and demand forces.

Economic Well-being

A broad measure of prosperity among individuals or nations, incorporating income, employment, and access to resources and services conducive to a high quality of life.

Market Economy

An economic system where supply and demand from consumers and businesses dictate the production and pricing of goods and services.

Supply and Demand

Fundamental economic model based on the idea that the price and quantity of a good or service is determined by the availability (supply) and desire (demand) of that good or service.