Business Law- Contracts: Capacity And Legality

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in pari delicto

Back 1

At equal fault.

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Adhesion Contract

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A standard-form contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms.

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Age of Majority

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The age at which an individual is considered legally capable of conducting himself or herself responsibly. A person of this age is entitled to the full rights of citizenship, including the right to vote in elections. In contract law, one who is no longer an infant and can no longer disaffirm a contract.

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Blue Laws

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State or local laws that prohibit the performance of certain types of commercial activities on Sunday.

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Contractual Capacity

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The threshold mental capacity required by the law for a party who enters into a contract to be bound by that contract.

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Covenant not to Compete

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A contractual promise to refrain from competing with another party for a certain period of time (not excessive in duration) and within a reasonable geographic area. Although covenants not to compete restrain trade, they are commonly found in partnership agreements, business sale agreements, and employment contracts. If they are ancillary to such agreements, covenants not to compete will normally be enforced by the courts unless the time period or geographic area is deemed unreasonable.

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Disaffirmance

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The legal avoidance, or setting aside, of a contractual obligation.

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Emancipation

Back 8

In regard to minors, the act of being freed from parental control; occurs when a child's parent or legal guardian relinquishes the legal right to exercise control over the child. Normally, a minor who leaves home to support himself or herself is considered emancipated.

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Exculpatory Clause

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A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

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Necessaries

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Necessities required for life, such as food, shelter, clothing, and medical attention; may include whatever is believed to be necessary to maintain a person's standard of living or financial and social status.

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Ratification

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The act of accepting and giving legal force to an obligation that previously was not enforceable.

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Usury

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Charging an illegal rate of interest.