Contract 3 - ICLR & Capacity

Question 1

What is Intention to Create Legal Relations?

Answer 1

An intention to enter into a contract with legal ramifcations
⛓️👨‍⚖️

Question 2

When are assumptions as to ICLR made?

Answer 2

• Commercial: there’s intention 🏪
• Domestic: no intention 👨‍👩‍👧‍👦
  Both can be rebutted

Question 3

What does the term ‘subject to contract’ mean?

Answer 3

Not binding until formal execution

Question 4

Who has capacity?

Answer 4

• over 18 🧔
• sound mind 🧠
• not suffering from factor ruling out capacity e.g. drunkenness 🤪🍻

Question 5

What is the rule on minors and capacity, and exceptions?

Answer 5

Person not bound by contract entered into under age of 18 even if other side didn’t know or they lied 🤥 except:
1. Contract concerns necessaries (if for their benefit, pay a reasonable price) 🪥🪙
2. Contract of employment, apprenticeship or education (if for their benefit) 👷‍♂️🧑‍🏫😁

Question 6

When does someone lack capacity?

Answer 6

Where they’re unable to make a decision for themselves at time contract is made

Question 7

What is the effect of entering a contract with someone lacking capacity?

Answer 7

• 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 😈

Question 8

How does drunkeness affect capacity?

Answer 8

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 🍻🤪🏎️

Question 9

What are necessities?

Answer 9

• Suitable to a persons condition of life
  and
• to his actual requirements
• at the time the goods or services are supplied