Chapter 7 - Capacity, Legality and Intention

Question 1

capacity

Answer 1

contracting parties must have the capacity to contract

some people are more vulnerable and received special protection

Question 2

minors (or infants)

Answer 2

under age of majority, not bound by their agreements

adults bound when contracting with minors but voidable my minor

Question 3

insanity

Answer 3

• no understanding of the nature of the transaction
• person claiming insanity has onus to prove it
• other person knew or ought to have known of insanity
• may repuidate when sane

Question 4

drunk

Answer 4

treated like insanity
- no understanding of the nature of the transaction
- person claiming insanity has onus to prove it
- other person knew or ought to have known of insanity
- may repuidate when sane

Question 5

others of limited capacity

Answer 5

corporations
crown bodies
enemy aliens
foreign govts
unions
bankrupts
indian act

Question 6

contracts performed illegally

Answer 6

lawful contract performed in an illegal way may be enforced by the court

illegal performance of a lawful contract often involves a breach of regulatory legislation that may void the contract

Question 7

if contract is performed illegally or against public policy, the court may order

Answer 7

contrat is void and restore parties to orginal position
serverance of illegal performance
enforcement if violation is procedural and not substantive

Question 8

some limited circumstances - a contract is required by statute to be in writing

Answer 8

ex: transfer of land

Question 9

types of contracts generally included under the statute of frauds and required to be in writing

Answer 9

– Longer than one year
– Land transactions
– Guarantees and indemnities
– When goods are sold over a specific value
– Promises in consideration of marriage
– Promises of an executor to pay a debt of deceased
from the executor’s own assets