Chapter 14 Flashcards
Contractural Capacity
The mental capacity to legally enter a contact
You must be mentally capable to enter a contract
Can minors enter into any contracts?
Yes, except for contracts they legally can’t enter into
Can a contract be void if a court preciously deemed someone as being mentally incompetent?
Yes
A contract can be avoidable (avoided at option of 1 party) if the person…
- Didn’t know about entering into a contract
- Lacked the mental capacity to understand the contract
The contract can then be voided by the incompetent part if 1 or both are present
Intoxication
A condition in which a person’s normal capacity to act/think is affected by alcohol/drugs
A contract involving intoxicated persons can be…
Voided or valid
depending if the intoxicated person understood the legal consequences
Some contracts aren’t enforceable because…
It goes against public policy and/or statutes
Business contracts that either restrict trade or are unconscionable are…
Against public policy
We want to encourage trade
Covenants not to complete
A contracultural promise to not compete w/ another party for a certain period of time + within a geographic area
Exculpatory clauses
A colossus releasing one of the parties for any injury/loss they caused, even if they’re at fault
Courts hate this bc its unconscionable + violates public policy
Courts can enforce exculpatory clauses if they’re…
Reasonable, fair, and not ambiguous
Do discriminatory contracts violate public policy?
Yes
When the object/performance of a contract is deemed illegal after both parties enter into the contract…
The contract is discharged by law
Usury
Charging a rate of interest that exceeds the legal limit
Are gambling contracts legal?
No
Having a license means…
You’re certified to practice your profession ONLY in the state you got your listen every from
Can you practice your profession if you got your license from another state?
No, it’s seen as illegal practice b/c you don’t have your lísiense in this state
The purpose of licensing statutes are to…
Protect us from illegal/unlicensed practitioners
If a contract is deemed illegal…
Either all or only the illegal portion of the contract is null and void
