Chapter 7 - The Element Of A Contract: Capacity, Legality And Intention

Front 1

What is a minor

Back 1

Persons under the age of majority which is 18 or 19 depending on the province is considered a minor.

Front 2

Are minors Bound by their agreements

Back 2

No, unless the contract is for necessaries or benefit until contracts of service.

Front 3

Are the adults with whom a minor is contract with bound?

Back 3

Yes

Front 4

Explain capacity

Back 4

Special protections poor people that are more vulnerable than others

Front 5

What is the difference between actual incapacity and artificial incapacity in a minor?

Back 5

Actual capacity is a child whose incapable of understanding.Artificial capacity is imposed on persons who are legally minors but are actually functioning members of society.

Front 6

Explain the test for capacity for minor

Back 6

Was the person in question under the statutory age of majority at the time the contract was created.Doesn't matter if the person understood the terms of the contract.

Important for online Merchants to include and disclaimers in their online contract.

Front 7

What are necessaries?

Back 7

Things required to function in society. Such as food clothing lodging and transportation.

Front 8

What is beneficial contracts of service?

Back 8

Contracts that benefit the minor, such as a contract of employment.

Front 9

What are the stipulations of contract for necessaries and beneficial contract of service?

Back 9

Miners must pay only a reasonable price for necessaries.Miners must repay money borrowed and used for necessaries, such as student loans. Enter contract of employment are binding if on the whole they benefit the minor.

Front 10

What happens on becoming an adult?

Back 10

If the minor ratifies a contract after he becomes an ad old he will be bound by it.Some contracts must be repudiated once the minor becomes an adult to avoid obligations, such as contracts for land shares in corporations.

Front 11

What is an executory contract?

Back 11

A contract yet to be performed.A contract at the stage when an agreement has been made but before performance is due.

Front 12

What is a partially executed contract?

Back 12

A contract at the stage when one party has performed and the other has not.

Front 13

Can minors avoid executory or and partially executed contract?

Back 13

Yes

Front 14

What is an executed contract?

Back 14

A fully performed contract. Minors are bound by executed contracts unless it can be demonstrated that what was received was not a value at all.

Front 15

What is parents liability?

Back 15

Parents are generally not responsible for contracts of minors, parents are liable if there is legislation that impose liability.

Front 16

What are the exceptions to parent liability?

Back 16

When the minor is acting as an agent for the parents or if the parents guarantee the minors obligations.

Front 17

Can minors be held liable in a tort?

Back 17

Yes, standard of behavior expected May differ.

Front 18

Can adults avoid the protections of minors under contract law by suing in tort?

Back 18

No

Front 19

What are the exceptions for infants liability for torts?

Back 19

When a tort arises independent of a contract. For example minor rent a 2 wheel drive car and damages it while off-roading. The minor can be sued for negligent use of car because it is outside what the contract considered.

Front 20

What is insanity in capacity?

Back 20

No capacity for those incapacitated because of insanity or mental incompetence is the person could not understand the nature of the ACT being performed.

Front 21

Who does the burden of proof of insanity rest on

Back 21

The person claiming to be incapacitated. They must also prove that the person he was dealing with knew or ought to have known of the incapacity.

Front 22

How is drunkenness treated in contract law?

Back 22

The same as insanity.

Front 23

How does one avoid a contract through drunkenness?

Back 23

The person is so intoxicated that he or she didn't know what parachute was doing. Other person must have known or ought to have known this. Upon reaching sobriety, the contract was repudiated.

Front 24

What are others of limited capacity?

Back 24

Corporations and bankrupt

Front 25

Explain legality

Back 25

An agreement must be legal and not contrary to the public interest to qualify as binding

Hint 25

Contracts to commit a crime avoid, contracts that are immoral or contrary to the public interest are also void.

Front 26

What is the difference between illegality as to formation of a contract and illegality as the performance?

Back 26

Illegality to formation is in the contract itself, illegality to Performance is the way the contract was performed.

Front 27

What are restrictive covenants?

Back 27

Generally contracts that restrain trade are illegal.

Front 28

Can a restrictive covenant ever be enforceable?

Back 28

Yes, if it is reasonable and necessary to protect the interests of the parties.

Front 29

What happens if a restrictive covenant is too broad?

Back 29

It will become void

Front 30

In what situations can issues of intention arise?

Back 30

Stated intention of the parties, commercial relations, domestic and social relations, social and business relations, exaggerated claims.

Front 31

Explain stated intention of the parties

Back 31

Is the parties states that they do not intend to be bound by the agreement courts will honor this.

Front 32

Explain issues of intention in commercial relations

Back 32

If the relationship between the parties is primarily commercial in nature courts will presume that the parties intend to be legally bound.

Front 33

Domestic and social relations

Back 33

In agreements between family members and friends there is a presumption that parties do not intend a legal consequences to flow from their agreement.If a lawyer draws up a contract then the presumption is different.

Front 34

Social and business relations

Back 34

Courts judge each situation on its individual merits, example group lotteries

Front 35

Exaggerated claims

Back 35

Must reads the question would reasonable person has taken the exaggerated claims seriously.

Front 36

What is found in the statute of frauds

Back 36

Contracts not to have been performed within one year, land dealings gratuities an Indemnities.

Front 37

What is the effect of the statute of frauds?

Back 37

Contract subject to the statute of frauds that is not in writing is not void, it is unenforceable. If their husband performance, courts will not unravel the contract.