Chapter 9 Legal Capacity to Contract

Kaitlyn Sutrick, Will Ahsmann, Josh
Larson, Steven Geis, Zach Edwards
The ability to understand the
consequences of a contract.
The law grants certain parties special
contractual protections designed to keep
them from being cheated due to their lack
of capacity
Ex. Minors, Mental Impaired
Age of Majority to Contract- The age at
which a person is entitled to the
management of his or her own affairs
Minor- A person who has not yet reached
the age of majority
Minority- Minor part of a persons life
(Under 18)
Emancipation- the severing of the childparent relationship
Minors contracts can be voidable unless they
are bound to the contracts if they are
Evidence of formal emancipation
When court decrees the minor emancipated
Evidence of informal emancipation
Minor marries
 Minor gives birth
 Minor moves out
 Minor has a full-time job
 Minor becomes a member of the armed forces
Mental Incapacity- Condition in which a party
to a contract is unable to understand the
consequences of the contract
Intoxication- Mental impairment caused by
voluntary use of alcohol, drugs, or inhalants
People with severe illness, or severe senility
lack capacity
A judge must rule if a person is mentally
incapacitated, and if so all contracts executed
by this person are void.
People who work for a business must have the
capacity to bind contracts.
Scope of Authority: within the range of
contractual acts the organization has
authorized him or her to be responsible for.

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