What does capacity mean?
understand the consequences of a contract
able to understand and represent own best interest
When is capacity presumed/presumed to lack?
presumed when adult is involved
minors are presumed to lack capacity
What is a minor?
person under the age of majority (usually 18)
What is a minor's liability under contracts?
contracts are usually voidable at minor's opinion
What is disaffirmance?
avoidance of the contract either during minority or for a reasonable time after reaching majority
What does a minor have to do to disaffirm a contract?
cancel the contract
return what is in his/her possession, even if it is just part of the item
receive money back
Why is contract law so harsh on business people who deal with minors?
minors are presumed to lack capacity and therefore the law wants to punish business people for dealing with minors
What is special about contracts for purchase and sale of land when it comes to a minor's right to disaffirm?
has to be of majority to disaffirm
When can a contract not be disaffirmed?
ratified contract after reaching majority
too long after reaching majority
liability for reasonable value of necessities consumed or used
What is implied ratification?
continue to use after reaching majority
continue to make pmts after reaching majority
What is the effect on a contract that has been made with an intoxicated person?
disaffirm only if
- capacity significantly impaired
- other party had reason to know of impairment
=> disaffirm promptly and offer to fully restore other party to before contract
Why are intoxicated persons under the least protection of the contract law?
got themselves into the situation
Review questions for Business Law and the Regulation of Business, 10th edition, Mann&Roberts, chapter 14