Chapter 7 - Contractual Capacity

Minor

A person who has not yet reached the age of legal adulthood.

What happens when two minors enter into a contract with each other?

Both parties have the right to disaffirm the contract.

True or False? An adult can disaffirm a contract with a minor.

False a contract between a minor and an adult can only be voidable by the minor.

True or False? A minor can keep the merchandise he or she received upon entering a contract, after they disaffirm the contract.

False a minor has to return what ever was agreed upon in the contract after they disaffirm it.

True or False? A person is still considered a minor the day before their 18th birthday.

False because on a person's 18th birthdays, that person is considered 18 years and 1 day old.

Necessaries

Food, clothing, shelter, and medical care.

If a minor claims to be over the age of majority, then he or she has committed ______________.

Fraud

Capacity

Legal ability to enter a contract.

Capacity relates directly to the involvement of ___________ in contracts.

Minors

Emancipated

Minors who are no longer under the control of their parents and are responsible for their own contracts.

What classes of persons are able to avoid contracts?

Minors, mentally impaired persons, persons intoxicated by alcohol or drugs, aliens, and convicts

Majority

Occurs when a person has reached the legal age of adulthood.

Minority

Occurs when a person is still below the age of majority.

Alien

Person who is living in this country but owes his or her allegiance to another country.

After reaching the age of majority a person can ________ contracts made during minority.

Ratify

The law permits minors, within certain limits to _______ or void their contracts.

Rescind

Guardian

Someone who is appointed to protect the rights of a mentally impaired person or a child.

Ratify

The approval of a contract.

Contractual Capacity

The law permits minors to rescind their contracts in order to protect minors from unscrupulous adults who might try to take advantage of their inexperience.

True or False? A minor is held responsible for the fair value of necessaries.

True

True or False? If a mentally impaired person has been declared insane or incompetent by a court action, and a guardian has been appointed to look after his or hers affairs, the mentally impaired person's contracts are absolutely valid.

True

True or False? Minors may disaffirm contracts even if they damage or destroy an item purchased as part of a contractual agreement.

True

True or False? Most states still consider it a criminal offense for a minor to lie about his or her age to buy age-restricted products.

True

True or False? The law shield minors in making contracts as a protective measure due to immaturity, inexperience, lack of education, or naivete of the minor that an adult can take advantage of.

True

True or False? To disaffirm a contract due to intoxication, a person must have been so intoxicated at the time of the contracting that he or she did not understand the purpose, nature, or effect of the transaction.

True

True or False? A minor may not affirm parts of a contract that are favorable and disaffirm the unfavorable parts.

True all or nothing.

Before a guardian is appointed, a mentally impaired person's contracts are ___________.

Voidable

Contracts made by minors are __________ by the minor.

Voidable

Abandoned

When an emancipated minor gives up the protection afforded to them as minors.

Rebuttable Presumption

When individuals enter into contracts, they are permitted by law to presume that the other party or parties have the capacity to contract.