Contract 3 - ICLR & Capacity Flashcards
What is Intention to Create Legal Relations?
An intention to enter into a contract with legal ramifcations
βοΈπ¨ββοΈ
When are assumptions as to ICLR made?
- Commercial: thereβs intention πͺ
- Domestic: no intention π¨βπ©βπ§βπ¦
Both can be rebutted
What does the term βsubject to contractβ mean?
Not binding until formal execution
Who has capacity?
- over 18 π§
- sound mind π§
- not suffering from factor ruling out capacity e.g. drunkenness π€ͺπ»
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 didnβt know or they lied π€₯
1. Contract concerns necessaries (if for their benefit, pay a reasonable price) πͺ₯πͺ
2. Contract of employment, apprenticeship or education (if for their benefit) π·ββοΈπ§βπ«π
When does someone lack capacity?
Where theyβre 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. πͺ₯πͺ
In any other case, position is binding unless βοΈ:
- person proves they didnβt understand what they were doing π€ͺ
AND - other side knew this π
How does drunkeness affect capacity?
If so drunk, canβt understand what theyβre doing:
- have to pay reasonable price for necessaries πͺ₯πͺ
- not bound by any other contract they make π»π€ͺποΈ
What are necessities?
Suitable to a persons condition of life and to his actual requirements at the time the goods or services are supplied