Defenses Part 1 Flashcards
What is incapacity in contract law?
Incapacity is the inability of a person to form the intent necessary to enter into a contract, developed to protect individuals deemed unable to protect their own interests.
What is the Traditional Infancy Doctrine?
Under the Traditional Infancy Doctrine, a minor’s contracts are voidable by the minor at any time before reaching the age of majority or within a reasonable time after becoming an adult.
What happens when a minor disaffirms a contract?
A minor who disaffirms a contract is entitled to recover all of the consideration the minor has conferred.
What contracts are not subject to the Traditional Infancy Doctrine?
Contracts that provide for necessities of life, where a minor misrepresents age, where the minor willfully harms property, and statutory exceptions like student loans and insurance.
What is the Necessaries Doctrine?
Under the Necessaries Doctrine, a minor is liable for the reasonable value of necessaries but is not held to have breached the contract.
What are considered necessaries?
Necessaries usually include items needed to live, such as food, clothing, and shelter.
What happens when a minor reaches the age of majority?
Once a minor reaches the age of majority, she has the power to affirm or ratify the contract, becoming bound by it.
What is the Modern Minority Rule?
Under the Modern Minority Rule, a court will find the contract voidable if it requires a disaffirming minor to pay reasonable compensation for the use or damage to the article purchased.
What is the rule regarding mental incapacity in contract law?
Transactions are voidable by a party if, due to mental illness or defect, the party was incompetent at the time of contract formation.
What are the exceptions to the mental incapacity rule?
Contracts for necessities are not voidable, and a contract is not voidable if performed in whole or in part, if the other party did not know of the mental illness, or if the contract is on fair terms.
What is the traditional Cognitive Test?
The traditional Cognitive Test assesses whether the party could understand the meaning, effect, and consequences of the transaction.
What is the modern Volitional Test?
The modern Volitional Test recognizes that a party may understand the transaction but cannot act reasonably due to mental illness.
What is the rule regarding intoxication in contract law?
A person who is so intoxicated as to be unable to understand the nature and consequences of the transaction may have made a voidable promise if the other party knew of the intoxication.
What are the exceptions for contracts made under intoxication?
Contracts for necessities are not voidable, and the intoxication standard is the same cognitive test as for mental incapacity.
What is the Duress Defense?
A contract is voidable by the victim if induced by an improper threat that leaves the victim with no reasonable alternative.
