contractual capacity.pdf - CONTRACTUAL CAPACITY n Contractual Capacity The minimum mental capacity required by law for a party who enters into a

contractual capacity.pdf - CONTRACTUAL CAPACITY n...

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1 CONTRACTUAL CAPACITY n Contractual Capacity: The minimum mental capacity required by law for a party who enters into a contractual agreement to be bound by it. Common law recognizes three classes of persons who are generally not considered to have sufficient capacity to be bound by their contracts: n Minors: In virtually all states, unmarried persons under the age of eighteen (18) are permitted to enter into any contract an adult can, provided that the contract is not one prohibited by law for minors (e.g., agreement to purchase cigarettes or alcohol). However, unlike those entered into by adults, contracts entered into by minors are generally voidable by the minor. n Mentally Impaired or Incompetent Persons: Like- wise, contracts entered into by persons who are, at the time of contracting, intoxicated (voluntarily or not) or mentally incompetent are generally voidable. n Recall that, unlike a void contract, which is unenforceable on its face, a voidable contract is presumed to be enforceable but for the presence of some factor -- here, the contractual capacity which permits the incapacitated party to avoid his or her otherwise valid contractual obligations.
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