38."Voidable Contract Caroli, who was 17 years old, signed an agreement to buy a used ornamental rug from Egan for $150. While Caroli was on his way to pick up the rug, Egan got an offer for $250 from someone else. When Caroli arrived with the money to complete the transaction, Egan told him he was unwilling to go through with the agreement because Caroli was a minor.

a.Can Egan cancel the contract?

a._______

b.Is this a voidable contract?

b._______

c.Can Caroli cancel the contract?

c._______

d.If Egan sells the rug to Caroli, can Caroli later return the rug?"

40."Contracts of Persons Who Are Mentally Incompetent Staples, following extensive injuries in an automobile accident, was declared mentally incompetent. He imagined himself to be in command of a large army engaged in protecting the country against an invasion. He ordered several large tents, sleeping bags, and other military supplies from a firm that specialized in selling such goods. When he failed to pay for page 168the goods, the firm attempted to seize Staples's bank deposits and his disability pension. Will the military supply firm be successful in its attempt to secure payment?

Principle of Law:

Decision:

"

42."Contracts of Persons Who Are Mentally Incompetent Ortelere, a retired teacher, had built up a substantial amount of funds in her retirement plan before she retired because of "involutional psychosis" (a form of mental illness). She had previously specified that a lowered monthly retirement benefit would be paid to her so that her husband would get some benefit from the retirement plan if she died before he did. After her mental problems began, she changed her payout plan and borrowed from the pension fund. As a consequence of the changes she made, her husband lost his rights to benefits. Two months after she made the changes, she died. The husband sued to reverse the changes his wife had made, claiming that she was not of sound mind when she made them. Will the changes in the plan be voided? [Ortelere v. Teachers' Retirement Board, 250 N.E.2d 460 (Wisconsin)]

Principle of Law:

Decision: