Contract Defenses

Question 1

Void

Answer 1

not legally valid from the beginning

Question 2

Voidable

Answer 2

contract that is valid and legally binding unless one party chooses to cancel it

Question 3

4 ways Contract is voidable/void

Answer 3

1. Mentally impaired (other party must have reason to know)
2. Infants (anyone under 18)
3. Legal guardianship
4. Intoxicated persons

Question 4

2. Infants

Answer 4

Yes minor can disaffirm a contract after they turn 18, as long as they don’t continue to perform the contract.
❗ Performing after 18 = ratification = bound.
⏳ Failure to disaffirm in a reasonable time = ratified.
🚫 Exception: Necessities (e.g., food, shelter, clothing).
Necessity = Food, Shelter, clothing

Question 5

1. Mentally impaired

Answer 5

Party is unable to understand in a reasonable manner the nature & consequences of the transaction or is unable to act in a reasonable manner in relation to the transaction

Question 6

How a minor disaffirms a contract:

Answer 6

1. Verbal statement: The minor can directly tell the other party they no longer want to be bound by the contract.
2. Action: The minor may also take an action that shows they do not intend to honor the contract (e.g., returning goods or not paying for a service).

Time frame: The minor can disaffirm the contract during their minority and for a reasonable time after reaching the age of majority (usually 18).