Contractual Capacity

rebuttable presumption

when people enter into contracts, they are permitted by law to presume that the other party or parties have the capacity to contract. this presumption can be challenged in court. it plays a key role in contracts made by minors because the law permits minors, within certain limits, to rescind or void contracts.

contracts for necessaries

a minor is held responsible for the fair value of necessaries. necessaries, or necessities, include food, clothing, shelter, and medical care.

disaffirming the whole contract

a minor may not affirm parts of a contract that are favorable and disaffirm the unfavorable parts.

ratification of minors' contracts

after reaching the age of majority, a person can ratify, or approve, contracts made during minority.

voidable contracts

by permitting minors to have the privilege of disaffirming contracts, the law provides young people with a second chance when they use poor judgement.

misrepresentation of age

if a minor claims to be over the age of majority, then he or she has committed fraud. fraud is a wrongful act, and minors are responsible for their wrongful acts.

returning the merchandise

if a minor still has the merchandise he or she received upon entering a contract, that merchandise must be returned when the contract is disaffirmed.

legal age

in 1972, the voting age was lowered from 21 to 18. at this time, many states lowered the age of majority from 21 to 18. for legal purposes, people turn 18 at the beginning of the day before their 18th birthday.

other classes of persons who are able to avoid contracts

mentally impaired persons, and intoxicated persons.

other capacity limitations

other classes of persons lack the capacity to enter into certain types of contracts: convicts (people convicted of crimes), aliens (people who are living in this country but owe their allegiance to another country), and enemy aliens (certain foreign-born persons designated as such during time of war)

intoxicated persons

persons who are intoxicated by alcohol or drugs at the time they enter a contract are sometimes able to disaffirm those contracts. to disaffirm a contract for this reason, 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.

emancipation and abandonment

some states have declared that minors who are no longer under the control of their parents are emancipated. this means they are responsible for their contract. a minor who marries or leaves home, giving up all rights to parental support, is considered emancipated and is said to have abandoned the protection afforded him or her as a minor.

definition of minority

the age of legal adulthood is known as the age of majority. a person who has not yet reached majority is considered a minor and is still in his or her minority.

contracts of minors

the law shields minors when they make contracts to protect them from unscrupulous adults. minors may be vulnerable because of: immaturity, inexperience, lack of education, and naive.

capacity

the legal ability to enter a contract. it relates directly to the involvement of minors in contracts

mentally impaired persons

they also have the right to disaffirm contracts because they are considered unable to make sound judgement. before a guardian is appointed to look after the affairs of a mentally impaired person, his or her contracts are voidable.

disaffirming contracts made with other minors

when two minors enter into a contract with each other, both parties have the right to disaffirm the contract.