Capacity Flashcards
Lack of capacity
a party lacked the legal ability to enter in a binding agreement, such as minors or those with mental incapacities, rendering the contract voidable or void
Contractual Capacity
(1) legal ability of an individual or entity to enter into a binding contact
(2) all parties involved must have the capacity to understand the terms and implications of the agreement for it to be enforceable
(3) without this capacity, a contract may be deemed void (invalid from the start) or voidable (can be canceled by the party lacking capacity)
Who lacks capacity?
Minors, mental incapacity, severe intoxication
Risks of undoing a K (contract) if one party is unable to understand the terms
(1) lack of stability of contractual relations/forfeiture
(2) can perpetuate stereotypes
(3) parentalistic
(4) takes away agency of contracting party
Who can contract?
A person does not have capacity to contract if they are:
(1) under guardianship; (2) an infant; (3) mentally ill; or (4) intoxicated
What are the exceptions to minorities voiding a contract
(1) marriage
(2) military service
(3) living a part/independently from parents (requires judicial proceeding)
contract is void
contract is not enforceable
voidable contracts
option to enforce a contract or choose to avoid a contract
principle of unjust enrichment
allows a party to recover a benefit conferred on another party when that benefit is unjustly retained, even if there’s no enforceable contract
restitution
a remedy that seeks to prevent one party from being unjustly enriched at the expense of another
> applied where a contract is unenforceable, void, or avoided, or when a party has conferred a benefit on another, but the benefit is unjustly retained
> core principal is that a person who has been unjustly enriched at the expense of another is required to make restitution
restitution v damages
restitution focuses on the defendant’s gain, while damages focus on the plaintiff’s lost
> to deprive the defendant of an unjust benefit
