Chapter 14 Flashcards
Contractual capacity
The legal ability to enter into contract. The threshold material capacity required by law for a party who enters into a contract to be bound by that contract
Minors are sometimes referred to as
Infants
Age of majority
The age at which an individual is considered legally capable of conducting himself or herself responsibly.
- full rights of citizenship
- 18 years old
Emancipation
The act of being freed from parental control
- terminates minority status
Disaffirmance
The legal avoidance or setting aside of a contractual obligation
Exceptions to A minors right to disaffirm
Misrepresentation of age
Contracts for necessaries
(Marriage and contracts to enlist)
Necessaries
Necessities required for life such as food, clothing, shelter, medical attention
Ratification
The act of accepting and giving legal force to an obligation that previously was not enforceable
Express ratification
When the individual reaches the age of majority, and then they orally or in writing state that they intend to be bound
Implied ratification
When the minor on reaching age of majority indicates an intent to abide by the contract
Intoxication
If the person was intoxicated enough to lack mental capacity then the agreement is voidable
If the person was intoxicated and still understood the legal consequences the contract is enforceable
Disaffirmance while intoxicated
You can disaffirm a contract while intoxicated and for a reasonable amount of time after becoming sober
Ratification while intoxicated
A person can ratify a contract after becoming sober
When are contracts with mentally incompetent people valid
If they had capacity at the time the contract was formed
Usury
Charging an illegal rate of interest
Contrary to public policy
Contracts that are not enforceable bc of the negative impact they would have on society
Contracts in restraint of trade
Contracts that affect the public policy that favors competition in the economy
Covenant not to compete
A contractual promise to refrain from competing with another party for a certain period of time and within a certain geographic area
Reformation
A court ordered correction of a written contract so that it reflects the true intentions of the parties
Unconscionable
A contract or clause that is void on the basis of public policy bc one party as a result of disproportionate bargaining power is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party
Exculpatory clauses
A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault
in pari delicto
Both parties are considered to be equally at fault