Elements of a valid contract and contractual capacity

Correct answer: Competent parties, mutual consent, lawful object, and consideration

The four essentials are competent parties, mutual consent, a lawful object, and consideration. Formalities and transaction steps do not replace those elements.

Correct answer: A person's legal ability to enter an agreement

Capacity is legal ability to contract. Financial resources, representative authority, and investment experience answer different questions.

Correct answer: A counteroffer because it changes a material term

Changing the offered price creates a counteroffer. Calling the response an acceptance does not make its terms match the offer.

Correct answer: The exchanged promises to pay and convey

Bargained-for promises can supply consideration before performance. Cash payment or delivery of a deed is not necessary to identify this exchange.

Correct answer: Lawful object, because the agreement's purpose is illegal

The illegal purpose defeats lawful object. Competence, matching intentions, and exchanged money do not cure that defect.

Correct answer: It may be avoided by a party the law protects

Voidable means a protected party may avoid the contract. It differs from void, which describes an agreement with no legal effect as a contract.

Correct answer: Consideration

A gift promise lacks a bargained-for return. The facts do not identify incapacity, illegality, or anyone acting for another.

Correct answer: Age alone does not establish contractual incapacity

Advanced age alone does not establish incapacity. Understanding the transaction matters; profitability or professional involvement is not a substitute for capacity.

Correct answer: Whether the employee had authority to act for the corporation

Authority to represent an owner is separate from a signer's personal capacity. A competent employee may still lack power to bind the corporation.

Correct answer: A neighbor agrees, in exchange for payment, not to exercise a valid legal right

Bargaining not to exercise a legal right is forbearance and can supply consideration. A hope, past unsolicited favor, or gift promise does not describe that exchange.

Correct answer: The purpose the agreement is intended to accomplish

Object refers to the agreement's purpose. The lawful-object inquiry concerns whether that purpose is legally permissible.

Correct answer: Unenforceability caused by a missing required formality

The stated defect is a barrier to court enforcement, not a missing essential element. A required writing is a separate enforceability inquiry.

Correct answer: Genuine mutual consent

Fraud inducing agreement can undermine genuine consent. A signature does not eliminate that concern.

Correct answer: It is void

In California, a minor's contract relating to real property or any interest in it is void, not voidable. The general voidable rule covers a minor's ordinary contracts, such as one for goods the minor already holds.

Correct answer: Yes; a moral obligation arising from a benefit already received can be consideration for the later promise

California treats a moral obligation that arises from a benefit already conferred on the promisor as good consideration for a later promise, to the extent of that obligation. The neighbor's requested work benefited the owner, so it can support the owner's promise.

Correct answer: No, because consideration generally need not be equal in economic value

Consideration concerns a bargained-for exchange of legal value, not precise economic equality. The buyer's promise is still exchanged for the seller's promise.

Correct answer: Notarization does not by itself establish the four essential elements

A formality cannot substitute for checking each essential element. Notarized signatures do not by themselves establish capacity, genuine consent, lawful purpose, or an exchange.

Correct answer: It does not establish lack of contractual capacity

Needing financing concerns ability to fund performance, not personal legal capacity. The facts do not establish incapacity from the financing need.

Correct answer: Whether duress undermined genuine consent

The coercive circumstances raise duress and genuine-consent concerns. A signature alone does not demonstrate freely given consent.

Correct answer: Competent parties, because the buyer's legal capacity is in question

Inability to understand the transaction raises a capacity issue. This is different from a diagnosis alone, a pricing problem, or authority to represent another.

Correct answer: A void agreement has no contractual legal effect; a voidable contract may be avoided by a protected party

Void concerns absence of contractual legal effect. Voidable concerns a protected party's ability to avoid a contract; form, deposits, and completion do not define the distinction.

Correct answer: The bargained-for repair work

An act performed as the requested return for a promise can be consideration. These repairs were the requested return for the owner's promise to pay.

Correct answer: The first concerns an enforcement formality; the second concerns genuine consent

A missing required writing is an enforceability issue. Fraud inducing a signature concerns genuine consent. Not every contract defect belongs to the same element.

Correct answer: Later regret alone does not negate the genuine agreement made at signing

Consent is assessed from the agreement and relevant circumstances, not simply later dissatisfaction. A changed market does not itself establish an original defect.

Correct answer: A counteroffer proposing a changed material term

Acceptance must match material terms, not just price. Conditional agreement to a changed required closing date proposes a different bargain.

Correct answer: A bargained-for exchange of something of legal value

Consideration is bargained-for legal value. It differs from careful thought, economic fairness, and capacity.

Correct answer: Examine the relevant ability to understand rather than treating a diagnosis alone as decisive

Capacity analysis must address legal ability and relevant understanding. A diagnosis alone, wealth, or transaction experience is not a substitute for that inquiry.

Correct answer: The deposit does not itself resolve the disagreement on price

Payment does not establish agreement on an unresolved material term. Consideration and mutual consent must be checked separately.

Correct answer: A bargained-for promise can be consideration, while a gift promise lacks a requested return

The distinction is the requested return exchange. A promise can have consideration before performance; generosity alone does not supply a bargain.

Correct answer: Consent and consideration do not substitute for a lawful object

Each essential element is distinct. Even sincere consent and an exchange of legal value cannot cure the agreement's prohibited purpose.

Correct answer: The first is capacity; the second is authority

Capacity concerns legal ability to contract. Authority concerns permission or power to act for another; the terms should not be reversed.

Correct answer: Material mistake can undermine genuine consent despite matching written terms

Mutual consent includes genuine agreement, not merely identical signatures or wording. A material mistake can require further consent analysis.

Correct answer: What legal value was bargained for in exchange?

The remaining element is consideration, identified by a bargained-for exchange of legal value. Recording, equal market value, and possession do not define it.

Correct answer: The general minority protection makes the contract voidable by the minor, not by the adult on that ground

The ordinary minority rule protects the minor. It does not give the adult a matching right to avoid solely on the other party's minority. In California this voidable rule applies to a contract like this one, for goods the minor holds; a minor's contract relating to real property is void.

Correct answer: The parties genuinely agree to the same bargain

Mutual consent is genuine agreement to the same bargain. Funding, equal value, and representative authority are separate concepts.

Correct answer: The buyer is unable to understand the transaction's nature and consequences

Inability to understand the transaction directly raises capacity concerns. Inexperience, price criticism, and financing needs do not establish incapacity by themselves.

Correct answer: Use 'voidable,' because the stated feature is a protected party's power to avoid

The described power to avoid is the defining feature of voidability. Void instead means no contractual legal effect.

Correct answer: The exchanged promises can supply consideration before the deposit is delivered

The exchange of promises can supply consideration now. A deposit is not the only possible consideration, and its later due date does not erase those promises.

Correct answer: The stated value difference does not itself defeat the bargained-for consideration

A difference in economic value does not itself defeat consideration. The inquiry is whether legal value was bargained for, and a writing does not replace that inquiry.

Correct answer: Whether applicable enforcement formalities, such as a required writing, are satisfied

The facts address the four essentials, but required formalities can still affect enforcement. Prior experience, equal value, and completed payment are not substitutes for that check.