Case Problem 7, p. 432 (Mallor 16^th Ed. Chap 14): Kenai Chrysler Center, Inc. v. Denison, 167 P.3d 1240 (Alaska Sup. Ct. 2007)

David Denison is a developmentally disabled young man who has been under the legal guardianship of his parents since 1999, when he turned 18.In October 2002, David was living in his own apartment, but his parents strictly controlled his finances.They visited him at least once each week to make sure he had a clean and safe place to live and was budgeting his food money properly.They also visited him socially several times every week and spoke with him nearly every day.The Denisons first learned that David wanted to buy a car when David called his father, Michael, from Kenai Chrysler and asked him to cosign for a used car; Michael refused.The next day, David again tried to purchase a car from Kenai Chrysler.This time, he was trying to buy a new car, which he could finance without a cosigner.David called his mother, Dorothy, to ask for money for a down payment.Dorothy refused and told him not to buy a car.She assumed her word would be final because she did not realize that David could obtain any appreciable amount of money with his debit card.David used his debit card and bought a Dodge Neon. Kenai Chrysler charged a total price of $17,802, including taxes, fees, and extended service plan.One or two days after David signed the contract, Dorothy came to Kenai Chrysler with David and informed the salesman who had sold the car to David and a Kenai Chrysler manager that David was under the legal guardianship of his parents and had no legal authority to enter into a contract to buy the Neon.Dorothy showed the manager David's guardianship papers and asked him to take back the car.The manager refused; according to Dorothy, he told her that Kenai Chrysler would not take back the car, and that the company sold cars to "a lot of people who aren't very smart."Dorothy insisted that the contract was void, but the Kenai Chrysler manager ignored her and handed the keys to David over Dorothy's objection.David drove off in the new car.Dorothy contacted Bannock, the general manager of Kenai Chrysler, the next day; he told her that he had seen the guardianship papers, but he still thought that the contract was valid and that David was bound by it.

THE ASK IS TO STATE IF THE COMMENTS BELOW ARE TRUE OR FALSE:

1. Because of Kenai Chrysler's deliberate actions in taking advantage of David Dennison, David Dennison and his parents are likely entitled to an award of punitive damages from Kenai Chrysler.

2. The contract between Kenai Chrysler and David Dennison, who is under guardianship after having been adjudicated to lack capacity to enter a contract, is voidable.

3. Kenai Chrysler is not required to permit David Dennison to disaffirm the contract, because Kenai Chrysler was given notice that David Dennison was under a guardianship after it sold the Dodge Neon to him.

4. David Dennison is not required to make restitution for any damages to and depreciation of the Dodge Neon, because Kenai Chrysler failed to act in good faith.

5. Kenai Chrysler violated its duty of good faith and fair dealing and complying with usage of trade, because Kenai Chrysler deliberately ignored the notice of David Dennison's parents that he was under their guardianship and the display of David's guardianship papers.

We believe the answers are: F, T, F, T, T