Pgs. 203-218 Capacity & Legality

Front 1

Contractual Capacity

Back 1

The legal ability to enter into a contractual relationship.

Front 2

Those that DON'T have Contractual Capacity

Back 2

Minors

Insane Persons

Intoxicated Persons

The party asserting incapacity or his or her guardian has the burden of proof

Front 3

Minor

Back 3

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

Front 4

Infancy Doctrine

Back 4

A doctrine that allows minors to disaffirm (cancel) most contracts they have entered into with adults

Front 5

Necessaries of life are EXEMPT from infancy doctrine

Back 5

true

Front 6

disaffirmance

Back 6

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

Front 7

If minor's contract is executed and goods, services, money change hands then the following rules may apply

Back 7

<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

Front 8

Ratification

Back 8

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

Front 9

Emancipation

Back 9

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.

Front 10

Necessaries of Life

Back 10

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.

Front 11

Mentally Incompetent Persons

Back 11

-

Front 12

Legal Insanity

Back 12

Declared legally insane by a proper court or administrative agency a contract entered into by a person adjudged insane IS VOID.

Front 13

Adjusted Insane

Back 13

Declared legally insane by a proper court or administrative agency. A contract entered into by a person adjudged insane IS VOID

Front 14

Intoxicated Person

Back 14

A person who is under contractual incapacity because of ingestion of alcohol or drugs to the point of incompetence

Front 15

Legality

Back 15

-

Front 16

Illegal contract

Back 16

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

Front 17

Usury Laws

Back 17

A law that sets an upper limit on the interest rate that can be charged on certain types of loans

Front 18

Gambling Statutes

Back 18

Statutes that make certain forms of gambling illegal

Front 19

Effect of illegality

Back 19

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

Front 20

in pari delicto

Back 20

A situation in which both parties are equally at fault in an illegal contract

Front 21

Contract in restraint of trade

Back 21

A contract that unreasonably restrains trade

Front 22

Licensing statute

Back 22

A statute that requries a person or business to obtain a license from the government prior to engaging in a specified occupation or activity

Front 23

Regulatory Statute

Back 23

A licensing statue enacted to protect the public

Front 24

Revenue Raising Statute

Back 24

A licensing statue with the primary purpose of raising revenue for the government

Front 25

Exculpatory Clause

Back 25

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

Front 26

Covenant not to compete

Back 26

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

Front 27

Unconsciable Contracts

Back 27

A contract that courts refuse to enforce in part or at all because it is SO oppressive or manifestly unfair as to be UNjust

Front 28

Elements of Unconscionably

Back 28

The parties possessed severely unequal bargaining power

The dominant party unreasonably used its unequal bargaining power to obtain oppressive or manifestly unfair contract terms