Al Long Ford sells Katrina, age 16, a Ford Escape under a contract that states K

Question

Al Long Ford sells Katrina, age 16, a Ford Escape under a contract that states Katrina will pay Ford $800 per month for the next 36 months. The contract has a clause explaining that if Katrina decides to return the car to Ford within 30 days of purchasing it, she will not have to pay the $800/month, but will need to pay $5,000. Katrina returns the car after 12 days but refuses to pay $5,000. What is the best argument that Katrina can use to support her claim that she should not have to pay? a. Even though her signature is on the contract, she did not really "accept" the contract, so it is void. b. Since she returned the car before making the first payment, there was no money exchanged between the parties. Since all contracts require consideration, this one is void. c. Since she was under 18 at the time of signing the contract, the element of capacity is missing, and the contract is void. d. Since most 16-year-old people do not receive income sufficient to support an $800/month payment, it is fair to infer that she lied and that the contract is void because she committed fraud.

Explanation / Answer

c. Since she was under 18 at the time of signing the contract, the element of capacity is missing, and the contract is void.

People under the age of 18 or in some states under age of 21, are legally deemed to lack contractual capacity. Therefore, the contract is void and unforceable under law.

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