CLEP Business Law

Category - Contracts

Julia, a 17-year-old high school senior, saved $5,000 from her part-time job working at Jack-in-the-Box. She decided to use the money to buy a car. Julia searched Craigs List and found a 1997 Toyota Camry with 190,000 miles. Julia went to Timmy's house and looked at the car. She thought it was beautiful. It was clean inside and out. And, most importantly, it was her favorite color-- powder blue! She handed Timmy a check for $5,000. Timmy gave her a receipt and the title. Three days later the car stopped working and had to be towed to a repair shop. Julia was told it would cost $7,000 to repair. Julia asked Timmy for a refund. Timmy refused. If Julia sues Timmy, the court will probably find that:
  1. Under the Lemon Law, Timmy must refund Julia's money.
  2. Because Julia is a minor, she can disaffirm the contract to purchase the car and get her money back from Timmy.
  3. Because the transaction was an "as is" sale, Julia could not get a refund.
  4. Because Julia drove the car for 3 days, it was her fault that the car needed repairs. Therefore, Julia is not entitled to a refund.
Explanation
Answer: B. If Julia sues Timmy, the court will probably find that because Julia is a minor, she can disaffirm the contract to purchase the car and get her money back from Timmy. Minors do not have the legal capacity to make contracts and can disaffirm or renounce a contract made. Disaffirmance relieves the minor of all obligations of under the contract.
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