Capacity and Genuine Assent ch.13 Flashcards
The ability to understand that a contract is being made and to understand its general meaning.
Contractual Capacity
Lacks understanding of the Nature of the transaction, the purpose of the transaction, and the effect of the transaction
reasons for Incapacities
Mental impairment, drug or alcohol impairment.
Factual Incapacities
Under the age of 18, minor
status incapacities
Adjudicated incompetent, as when a guardian has been appointed
Legal incampacity
“If the degree of intoxication is such that a person does not know that a contract is being made, the contract is voidable by that person. however, they do not retain this right if significant time is used after the period of intoxication to rescind the contract.”
Intoxication
Minors must pay a reasonable value for necessaries supplied to them.
Minority Equity rule
A minor who appears older enter into a contract, is the contract voidable? is restitution required?
yes, no
A minor who misrepresents their age enters into contact. Is it avoidable? is restitution required?
yes, yes
A minor decides not to avoid a contract after significant time after turning 18
contract is ratified
A minor can ratify contracts after reaching a majority by expressly saying so or by their conduct.
True.
Unilateral with duty owed mutual mistake of facts
Mistake
Fraud or Negligent Misrepresentation
Deception
“making of a false statement of a past or existing fact, with knowledge of its falsity or with reckless indifference as to its truth, with the intent to cause another to rely thereon, and such person does rely thereon and is harmed thereby”
Fraud
If a contract contains negligent misrepresentation the injured party has the right to void the contract
true
