Contract 3 - ICLR & Capacity Flashcards
What is Intention to Create Legal Relations?
An intention to enter into a contract with legal ramifcations
⛓️👨⚖️
When are assumptions as to ICLR made?
- Commercial: there’s intention 🏪
- Domestic: no intention 👨👩👧👦
Both can be rebutted
What does the term ‘subject to contract’ mean?
Not binding until formal execution
Who has capacity?
- over 18 🧔
- sound mind 🧠
- not suffering from factor ruling out capacity e.g. drunkenness 🤪🍻
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 or they lied 🤥
1. Contract concerns necessaries (if for their benefit, pay a reasonable price) 🪥🪙
2. 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?
- Person w/o capacity still remains liable to pay a reasonable price for necessaries. 🪥🪙
In any other case, position is binding unless ⛓️:
- person proves they didn’t understand what they were doing 🤪
AND - other side knew this 😈
How does drunkeness affect capacity?
If so drunk, can’t understand what they’re doing:
- have to pay reasonable price for necessaries 🪥🪙
- not bound by any other contract they make 🍻🤪🏎️
What are necessities?
Suitable to a persons condition of life and to his actual requirements at the time the goods or services are supplied
