Contract 1.3 - Parties and Capacity Flashcards
Who has capacity?
- over 18 🧔
- sound mind 🧠
- not suffering from factor ruling out capacity 🤪🍻
What is the rule on minors and capacity, and exceptions?
Person not bound by contract entered into under age of 18 even if other side didn’t know/they lied 🤥
- Contract concerns necessaries (if for their benefit, pay a reasonable price) 🪥🪙
- Contract of employment, apprenticeship or education (if for their benefit) 👷♂️🧑🏫😁
When does someone lack capacity?
Where they’re unable to make a decision for themselves at time contract is made
What is the effect of entering a contract with someone lacking capacity/intoxicated?
- Person w/o capacity still remains liable to pay a reasonable price for necessaries. 🪥🪙
Position is binding unless
- person proves they didn’t understand what they were doing 🤪 &
- other side knew this 😈
What are necessities?
Suitable to a persons condition of life and to his actual requirements at the time the goods or services are supplied
How can you rebutt presumption of intention to create legal relations?
- Clear & unambiguous evidence to contrary
- Can be rebutted in contract itself (ie. “subject to contract” or “binding in honour only”.)
- Oral statement in anger may be enough
When is someone mentally in-capable of entering contract?
Means they are unable to:
- understand the relevant information
- retain the relevant information
- use the relevant information
- communicate the decision
- Intoxicated
How may a party assign contractual rights to another ?
- A is a party to a contract with B
- B assigns their rights under the contracts to C
- C may sue A on original promise given to B
Who can enforce the terms of a contract?
Generally only those party to the contract
Exception
- TP under certain circumstances under CRTPA 1999
When can a TP enforce a term of a contract under the CRTPA 1999?
TP may in his own right enforce a term of contract if:
- The contract expressly provides that he may, or
- The agreement purported to confer a benefit on TP, and it appears the contract terms intended the term to be enforceable by TP
AND
- TP must be expressly named or be a member of a benefiting class of people described in the contract
Does TP have to exist at the time contract is made to enforce terms under CRTPA 1999?
No
Does CRTPA 1999 allow contract to place obligations on TPs (who can enforce terms under the act)?
No - only benefit
What are the limitations on the CRTPA 1999?
Types of contracts excluded
- Employment contracts
- Articles of association
- If contract expressly excludes
How can CRTPA 1999 effect the variation or recession of contracts?
Parties cannot change contract to detriment of TP if
- TP has communicated his agreement to term benefiting him
- TP has relied on the term of the contract and the promisor is aware of the reliance, or
- The promisor can reasonably be expected to have foreseen TP would rely on the term and TP has in fact relied on it.
What are the common law methods of circumventing doctrine of privity?
- Agent contracts on behalf of principle
- Assignment of benefit of contract by novation agreement
- Collateral Contract between promisor and TP
- Trust (A makes promise to B for benefit of C)
- Subrogation
When might the courts find a collateral contract that effects privity of contract?
One party of a contract (A) and TP outside of contract, where TP has given a promise on which A relied and entered into the contract with the other party (B) and for which TP has received some benefit (e.g. comission)
