contractual capacity
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Ch 7 Capacity
Contractual Capacity
Chapter 7Pages 144-157
POINTS TO PONDER
Have you ever entered a contract and then reconsidered your choice?
Make a list of as many things as you can think of that would give a person the capacity to contract.
CAPACITY LEGAL ABILITY TO
ENTER A CONTRACT
Under the age of 18
What did the age of majority used to be?
21 years old
When does a person legally turn 18? Pg 148
LEGAL AGE
Why Does the Law Permit Minors to Rescind their Contracts? Protection from adults inexperienced
What is a Minor? Under the age of 18
What did the age of majority used to be?21 years old
Which types of minors are held responsible for their contracts? Emancipated
• Not under control of parents
• Married
Individuals who leave home abandon rights of a minor.
Misrepresentation of Age What happens if you enter an agreement as
a minor yet claimed to be of age?• This is Fraud• You will be responsible and may be sued
Why do you think the law prohibits minors from purchasing alcohol?• Protection, lack of maturity, & judgment
Can minors disaffirm a contract even if they have damaged the item purchased? YES. Some states may deduct some money
for damages.
VOIDABLE CONTRACTS Minors may disaffirm their contract.
DISAFFIRMStatement Act
Return MerchandiseDisaffirm in writing pg 153
Disaffirm the entire contractAll or none
Disaffirming Contracts Put in Writing Include:
• Sellers name & address• Minors Name• Date & Place of contracting• Time & Place of Return
You want to start a band with other minors can you enter a legally binding contract?
What can you do to make the agreements binding?Get parents to sign on behalf of the minor.
Ratify or Approve What happens if you buy a car as a
minor and still owe money on it after you become an adult?
Do you have the rights of a minor still or an adult?
By keeping, using, or selling products after reaching the age of majority, you ratify the contract.
Ratify or Approve Orally In writing Actions
• Using Item• Making Payments
Colleen bought a car as a minor. She paid a down payment and promised to pay installments over the next two years. After she reached 18 she continued to make payments. The act of making payments was a ratification. She could no longer return the car.
Contracts for Necessaries Minors are held responsible for
necessaries.• Courts must prove item was a necessary &
that parents weren't adequately providing for the child.
• Food, clothing, shelter, & medical care Read example 3 pg 156
Exceptions to capacity RuleIn Some Sates Life or Car Insurance Business in their name
Imagine you were a pop starHow might your ability to sign contracts
affect you? (financially etc..)
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