Chapter 9 Legal Capacity to Contract

Report
By
Kaitlyn Sutrick, Will Ahsmann, Josh
Larson, Steven Geis, Zach Edwards
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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
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Ex. Minors, Mental Impaired
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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
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Minors contracts can be voidable unless they
are bound to the contracts if they are
emancipated
Evidence of formal emancipation
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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
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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
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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.
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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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