Term
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Definition
| the law presumes that the parties to a contract have the requisite contractual capacity to enter into the contract. Certain persons do not have this capacity: minors, insane persons, and intoxicated persons. |
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Term
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Definition
| Females under 18 and males under 21. The most prevalent age of majority is 18 male & female. Any age under the statutory age of majority is called the period of minority. |
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Term
| 4 Key issues relating to minors and contracts |
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Definition
The infancy doctine
Ratification
Parents Liability for their child's contracts
Necessaries of Life |
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Term
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Definition
A doctrine that allows minors to disaffirm or cancel most contracts they have entered into with adults.
Doctrine based on public policy that reasons that minors should be protected from unscrupulous behavior of adults.
-Disaffirmance- the act of a minor to rescind a contract under the infancy doctrine.
-Competent party's duty of restitution: if the minor has transferred consideration to the competent party before disaffriming the contract, that party must place the minor in status quo.
-minors duty of restoration: a minor is obligated only to return the gods or property he or she has recieved from the adult in the condition it is in at the time of disaffirmance.
-minors duty restitution: most states provide that the minor must put the adult in status quo upon disaffirmance of the contract if the minors intentional conduct caused the loss of value to adult's property. ie: car wreck
-misrepresentation of age: minors who misrepresent their age must place the adult in status quo if they disaffirm the contract. |
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Term
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Definition
| If a minor does not disaffirm a contract either during the period of minority or within a reasonable time after reaching the age of majority: the contract is accepted, the minor(now an adult) is bound by the contract, and the right to disafirm has been lost. |
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Term
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Definition
Minors are obligated to pay for food, shelter, clothing and medical services.
The sellers recovery is based on the equitable doctrine of quasi-contract rather than on the contract itself. |
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Term
| Parents liability for their children's contracts |
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Definition
Parents owe a legal duty to provide food, clothing, shelter and other necessaries of life for their minor. Parents are liable for their children's contracts for necessaries of life if they have not adequately provided such items.
The parental duty of support terminates if a minor becomes emancipated. |
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Term
| Mentally Incompetent Persons |
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Definition
The law protects people suffering from substantial mental incapacity from enforcement of contracts against them.
Legal insane- a state of contractual incapacity as determined by law.
1. Adjudged insane:
2. Insane but not adjudged insane. |
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Term
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Definition
| One requirement to have an enforceable contract is that the object of the contract must be lawful. Contracts with an illegal object are void and therefore unenforceable.There are 2 kinds of illegality: Contracts contrary to statutes, and contracts contrary to public policy. |
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Term
| Contracts Contrary to statutes |
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Definition
federal and state legislatures have enacted statutes that prohibit certain types of conduct. Contracts to perform an activity that is prohibited by statute are illegal contracts.
-usury laws
-gambling statutes
-sabbath laws
-licensing statutes |
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Term
| Contracts Contrary to statutes |
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Definition
federal and state legislatures have enacted statutes that prohibit certain types of conduct. Contracts to perform an activity that is prohibited by statute are illegal contracts.
-usury laws
-gambling statutes
-sabbath laws
-licensing statutes |
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Term
| Contracts contrary to public policy |
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Definition
contracts that have a negative impact on society or that interfere with the publics safety and welfare. Such contracts are void.
-immoral contracts
-contracts in restraint of trade.
-Exculpatory Clauses: use it for normal negligence. |
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Term
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Definition
Since illegal contracts are void, the parties can sue for nonperformance but it will not proceed, they will just throw it out.
The court will generally refuse to enforce an illegal contract.
THE COURT WILL GENERALLY LEAVE THE PARTIES WHERE IT FINDS THEM (THE CONTRACT WAS ILLEGAL) IE- BUILDING LICENSE. |
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Term
| 4 Exceptions to the General Rule |
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Definition
1. innocent persons who were justifiably ignorant of the law or fact that made the contract illegal.
2. Persons who were induced to enter into an illegal contract by fraud, duress, or undue influence.
3. Persons who entered into an illegal contract withdrawn before the illegal act is performed.
4. Persons who were less at fault than the other party for entering into the illegal contract. |
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Term
| Using a Covenant Not to complete with a sale of a business |
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Definition
-Covenants not to be complete that are ancillary to a legitimate sale of a business or employment contract are lawful if they are reasonable in 3 aspects:
1. The line of business protected: if you sell a restaurant you can have a deal no to open a competing restaurant. But you cannot say they cant open any business.
2. The geographical are prohibited: in most courts, it is within 75 miles of the business. Not set in stone, just most common.
3. The duration of the restriction: the reasonable time is 2 years. |
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Term
| Doctrine of Unconscionability |
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Definition
-some lawful contracts are so oppressive or manifestly unfair that they are unjust.
-To prevent the enforcement of such contracts, the courts have developed the equitable doctrine of unconscionability.
-A contract found to be unconscionable under this doctrine is called an unconscionable contract, or a contract of adhesion.
-The parties possessed severely unequal bargaining power.
-The dominant party unreasonably used its unequal bargaining power
-The adhering party had no reasonable alternative. |
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