Chapter 13: Capacity and Legality WHAT THIS CHAPTER IS ABOUT If a party to a contract lacks capacity, an essential element for a valid contract is missing, and the contract is void. Some persons have capacity to enter into a contract, but if they wish, they can avoid liability under the contract. Also, to be enforceable, a contract must not violate any statutes or public policy. I. CONTRACTUAL CAPACITY A. MINORS - A minor can enter into any contract that an adult can enter into, as long as it is not prohibited by law (for example, the sale of alcoholic beverages). 1. Age of Majority, Marriage, and Emancipation A person who reaches the age of majority (eighteen, in most states) is not a minor for contractual purposes. In some states, marriage terminates minority status. Minors, over whom parents have relinquished control, have full contractual capacity. 2. A Minor’s Right to Disaffirm A minor can disaffirm a contract by manifesting an intent not to be bound. A contract can ordinarily be disaffirmed at any time during minority or for a reasonable time after a minor comes of age. (An adult cannot disaffirm a contract with a minor on the ground that the minor can.) 3. A Minor’s Obligation on DisaffirmanceA minor cannot disaffirm a fully executed contract without returning whatever goods have been received or paying their reasonable value. a. What the Adult Recovers:
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- Business Law Outlines, mentally incompetent, Disaffirmance