Chapter 14 Flashcards
What is contractual capacity?
Legal ability to enter a contract. Lacks capacity if minor, mentally incompetent, or intoxicated.
Can minors enter contracts? What happens once they each 18?
Minors can enter into any contract that an adult can. Minors who enter contracts are voidable, can ratify or disaffirm once reaching 18.
What is disaffirmance?
Setting aside contractual obligation, not bound. Through words or conduct, reasonable time afterward, before majority age, even if age misrepresented.
Minor’s obligations on disaffirmance: return the _______, possible ___________.
Goods, restitution
How does a minor ratify a contract once they turn 18?
Can ratify expressly or implied.
What is intoxication in capacity?
Normal capacity to act or think is inhibited. Voidable if lacked mental capacity. Valid if understood the legal consequences.
How does disaffirmance apply to intoxication in contractual capacity?
Must disaffirm while intoxicated or within a reasonable time after, must return all consideration received.
How does ratification apply to intoxication (capacity)?
Expressly or impliedly once sober. Failure to disaffirm is ratification, acts or conduct inconsistent with an intent to disaffirm ratify the contract.
What is mental incompetence in capacity?
Can be void, voidable, or valid. Void if court previously judged mentally incompetent. Guardian will contract for incompetent.
Can a contract be void if a person has yet to be determined mentally incompetent by court (capacity)?
May void if did not know forming a contract, or lacked mental capacity to understand nature, purpose, and consequences.
When are contracts valid involving an incompetent person (capacity)?
When not deemed incompetent and formed a lucid interval.
A contract is valid and enforceable if formed for a _____ purpose. ________ is always void and unenforceable.
Legal, illegal
What are licensing statutes?
Certain professionals must obtain license. Depends on purpose of statute if contract enforceable, revenue may be enforceable, safety is not enforceable.
What is an unconscionable contract/clause?
Bargains are so oppressive, courts relive innocent parties of part or all of their duties.
What are exculpatory clauses (contrary to public policy)?
Release from legal liability if monetary or physical injury, regardless of fault. Enforceable when not against public policy, not ambiguous, do not shield parties from intentional conduct.
