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28 Cards in this Set
- Front
- Back
Contractual Capacity
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The legal ability to enter into a contractual relationship.
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Those that DON'T have Contractual Capacity
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Minors
Insane Persons Intoxicated Persons The party asserting incapacity or his or her guardian has the burden of proof |
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Minor
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A person who has NOT reached the age of majority.
Common law defines minors as females under the age of 18 and males under the age of 21. Age of Majority is usually 18 anything younger than 18 is called period of minority |
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Infancy Doctrine
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A doctrine that allows minors to disaffirm (cancel) most contracts they have entered into with adults
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Necessaries of life are EXEMPT from infancy doctrine
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true
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disaffirmance
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The act of a minor to rescind a contract under the infancy doctrine. Disaffirmance may be done orally, in writing, or by the minor's conduct.
reasonable time determined on a case by case basis |
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If minor's contract is executed and goods, services, money change hands then the following rules may apply
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<b>Minor's Duty of Restoration</b>
A rule which states that a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance. <b>Competent party's duty of restitution</b> A rule which states that if a minor has transferred money, property, or other valuables to the competent party before disaffirming the contract, that party must place the minor in status quo--back how they were |
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Ratification
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The act of a minor after the minor has reached the age of majority by which he or she accepts a contract entered into when he or she was a minor
didnt dissafirm within reasonable time and therefore the contract automatically becomes binding |
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Emancipation
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The act or process of a minor voluntarily leaving home an living apart from his or her parents
case by case basis--marriage, military, new household, etc. |
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Necessaries of Life
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Food, clothing, shelter, medical care, and other itesm considered necessary to the maintenance of life.
Minors must pay the reasonable value of necessaries of life for which they contract The seller's recovery is based on the equitable doctrine of QUASI-CONTRACT rather than on the contract itself. Under this theory the minor i obligated only to pay the reasonable value of the goods or services received. Reasonable value is determined on a case by case basis. |
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Mentally Incompetent Persons
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-
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Legal Insanity
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Declared legally insane by a proper court or administrative agency a contract entered into by a person adjudged insane IS VOID.
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Adjusted Insane
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Declared legally insane by a proper court or administrative agency. A contract entered into by a person adjudged insane IS VOID
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Intoxicated Person
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A person who is under contractual incapacity because of ingestion of alcohol or drugs to the point of incompetence
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Legality
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-
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Illegal contract
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A contract that has an illegal object. Such contracts are void.
not illegal unless the parties agree to go forward with it and complete it |
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Usury Laws
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A law that sets an upper limit on the interest rate that can be charged on certain types of loans
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Gambling Statutes
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Statutes that make certain forms of gambling illegal
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Effect of illegality
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A doctrine which states that the courts will refuse to enforce or rescind an illegal contract and will leave the parties where it finds them. UNLESS:
innocent persons were ignorant of the law persons who were induced to enter contract by fraud Persons who entered into an illegal contract who withdraw before the illegal act is performed |
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in pari delicto
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A situation in which both parties are equally at fault in an illegal contract
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Contract in restraint of trade
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A contract that unreasonably restrains trade
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Licensing statute
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A statute that requries a person or business to obtain a license from the government prior to engaging in a specified occupation or activity
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Regulatory Statute
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A licensing statue enacted to protect the public
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Revenue Raising Statute
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A licensing statue with the primary purpose of raising revenue for the government
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Exculpatory Clause
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A contractual provision that relieves one 9or both) of the parties to a contract form tort liability for ordinary negligence.
Also known as a release of liability clause |
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Covenant not to compete
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A contract which provides that a seller of a business or an employee will NOT engage in a similar business or occupation within a specified geographical area for a specified time follwoing the sale of the business or termination of employment--NONCOMPETE clause
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Unconsciable Contracts
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A contract that courts refuse to enforce in part or at all because it is SO oppressive or manifestly unfair as to be UNjust
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Elements of Unconscionably
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The parties possessed severely unequal bargaining power
The dominant party unreasonably used its unequal bargaining power to obtain oppressive or manifestly unfair contract terms |