Capacity Flashcards
What is generally the effect of trying to contract with someone who does not have capacity?
No contract is formed
What is the general rule in relation to minors and capacity?
They are not bound by any contract even if the other party does not know they are a minor
What is the exception to the general rule that minors do not have capacity to contract in relation to necessaries?
Minor is bound by a contract to supply necessaries to them if the contract is for their benefit.
Minor must pay reasonable price not the actual cost of the necessaries supplied
What is the exception to the general rule that minors do not have capacity to contract in relation to contracts of employment/apprenticeships/education?
Minor is bound by any contract of employment, apprenticeship or education - but only if it is for their benefit
What is the effect of entering into a contract with a minor?
Unless an exception applies, the contract cannot be enforced against he minor.
The minor can however enforce it against the other party.
Can a minor ratify a contract once they turn 18?
Yes - the effect of which will be that the contract will be binding on them
When does a person lack capacity under the Mental Capacity Act 2005?
They lack capacity if ‘he is unable to make a decision for himself in relation to the matter’ at the time contract is made, whether the impairment is temporary or permanent
Does a person either have capacity all the time or lack capacity all the time?
No. Capacity is not something a person has or has not for all purposes. Whether someone has capacity is a question to be asked in relation to a particular decision
What impairment must a person have to lack capacity?
They must be unable to
- understand the relevant information
- retain the relevant information
- use the relevant information
to communicate a decision
What is ‘relevant information’ in assessing impairment for lack of capacity?
Relevant information relates to the reasonably foreseeable consequences of:
- deciding one way or another or
- failing to make a decision
Does court retain any role or power in relation to a person’s capacity under the Mental Capacity Act?
The court has the power to make declarations as to a person’s capacity and ability to contract in specified situations
What is the effect of entering into a contract with a person lacking capacity?
A person without capacity still remains liable to pay a reasonable price for necessaries
In any other case the contract is binding unless person claiming incapacity can establish:
- that they did not understand what they were doing and
- that the other party knew this to be the case
What are necessaries?
Goods or services suitable to a person’s condition of life and to their actual requirements at the time when the goods or services are supplied
