Ch. 14 Capacity

Minors

A minor (under the age of 18) generally has the right to disaffirm contracts and thus are voidable at the minor's option.

Capacity

Ability to provide consent

Obligations for minor who wants to disaffirm

Basic obligation= return the consideration--> if you are a minor and bought a car but you want out of the contract you have to give the car back -minor can still rescind if they are unable to give the car back

2. Mentally Ill

includes those who have a sufficient mental defect -includes dementia, severe depression, senality

Effect of lack of capacity

-Contract is voidable -a person with lack of capacity has the ability to cancel the contract

Contract can become void rather than voidable in regards to capacity if:

-court declares you are mentally incompetent then you enter a contract -enter a contract while in a coma -enter a contract while unconcious

Duties if minor disaffirms from contract

-responsible for the depreciation of what they get ex.) minor buys car but doesnt want it and returns it -minor is responsible for the depreciation of the car

Contracts minors cannot get out of for being a minor (4)

1. Marriage 2. Child support 3.Student loans 4.insurance agreements

Categories of those who do not have Capacity

1. Minors 2. Mentally Ill 3. Intoxicated

Ratification

Choosing to remain in a contract. -typically not able to ratify until they are 18 -can be oral or written -cannot ratify then disaffirm

Entering contract when impaired

Contracts are voidable unless you were already deemed incompetent by a judge before you entered a contract, the contract is automatically void

General rule for the mentally impaired

Mentally impaired person is responsible for damages depreciation unless the other party knew they were impaired

Canceling a contract rule for minor

can cancel it immediately unless it deals with real estate then they can get out of it when they are 18 with a limited window

Intoxicated People

contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts; these contracts are voidable; but rarely successful bc judges are extremely unsympathetic to intoxicated people

emancipation

termination of parents right to control you -parents consent to this and court approves it -DOES NOT CREATE CAPACITY

Disaffirmance

when you exercise your right to rescind -no special way that a minor has to do it when they want to rescind