Question

1. john a 17 year old, purchases a Pool Table, 4 Cue Sticks, and a set of rack and pool balls. A week later after he turns 18, he seeks to return only the pool table and states he will keep the other items. Can John avoid the Contract this way? 2. Bob loans Bill $5000 at 45% interest to be paid yearly A State Usury Statute states that the highest interest rate that can be charged is limited to 3 % per month on the principle Bob claims that since the Statute does not address the yearly rate to be paid, he can charge his interest rate of 45% yearly Is he correct? Why? Why Not

Answer 1

Ans 1. Since John was only 17 years when he purchased Pool Table, 4 Cue Sticks, and a set of rack and pool balls. Now when he wants to return only pool table after attaining the age of 18 years, he had attained legal age for enforcing his contracts. In this example he can avoid the contract by returning only pool table and states he will keep the other items. Now he is in his full capacity without depending upon others.

Ans 2. In this example, Bob loans at 45% interest rate yearly which is more according to Usury Statute states that the highest interest rate that can be charged is limited to 3 % per month on the principle. As per the statute, the maximum yearly interest rates can be charged are 3% * 12= 36% yearly interest rate. So Bob's interest are higher than Usury statute, and he is liable for the breach of contract by the authorities.