Legal Capacity - 3 L's

Question 1

Legal Capacity - Gral Rule

Answer 1

• Parties must have full capacity
• • not be infant/insane/intoxicated (3 I)
• 3 I’s have defense against enforcement
• Contracts are voidable unless ratified EXCEPT for contracts for necessaries by minors

Question 2

Legal Capacity - Infants (

Answer 2

• Gral rule: contracts can be disaffirmed EXCEPT for those for past necessaries
• Election to disaffirm at majority of age, within reasonable time
• Must return remainder of luxury item and any money paid will be offset from benefits received
• Implied ratification if action for enforcement
• Parents not liable

Question 3

Legal Capacity - Infants - Creditor recovery rule

Answer 3

• When infant >14

Question 4

Legal Capacity - Insanity - Gral

Answer 4

• clinical insanity, senility, mental retardation and other neurological disorder
• Requires judicial determination
• Burden of proof: on party that claims it.

Question 5

Legal Capacity - Intoxication - Gral

Answer 5

• Standard: Impaired individual unable to understand nature, terms and legal consequences from entering into contract
• Almost never acceptable as defense if voluntary

Question 6

Legal Capacity - Agency Liability - Ppal liability

Answer 6

For agent with enough authority and not in frolic of its own

Question 7

Legal Capacity - Agency Liability - Agent liability

Answer 7

• Fails to disclose lack of capacity of ppal
• Misrepresents scope of authority
• Represents he is dealing by own account OR there is no ppal OR personally guarantees contract