Chapter 8- capacity to contract and legality of object.docx...

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Chapter 8- Capacity to contract and legality of objectThe burden of proving essential elements of a contractEssential elements-offer-acceptance-consideration-intentionOther presumptions:1. The defendant had the capacity to make a contract2. The contract is legal-Plaintifmust prove offer, acceptance and consideration, court will presume intention-Defendantmust show that he/she did not have legal capacity to enter into the contract or that the contract was not legalMeaning of capacity-we assume the other party to a contract has the capacity to be bound by it. Not always the case-not always obvious to detect a lack of capacity NOT DONEWho doesn’t have capacityThose without capacity to contract include:-> minors-> persons with diminished capacity-> bankrupt debtorsWhat happens with no capacity?-> party lacking capacity has right to repudiate the contact-> repudiate:reject or declare intention not to be bound- someone without capacity may attempt to do thisWhat happens when a party lacks capacity?Voidable contracts-still in force, but can be terminated by parties (courts try to put back into position before contract made)void contracts-nullity from their inception (courts try to put back into position before contact made)illegal contracts-void contracts, but courts will not assist parties in enforcing an illegal contractLimited capacityMinor or infant:a person who has not attained the age of majorityRULE: a contract made by a minor is not binding on her but binding on the other side, whether or not the other person is aware that he is dealing with a minorNecessaries and Beneficial contracts for service-Exception to the general rule- a minor is bound by any contract for supply of necessaries,, essential goods and services-Necessaries-good, clothing, lodging, medical attention, legal advice, transportation
-Beneficial contracts of service-contracts of employment or apprenticeship found to be for a minor’s benefit->cannot be exploitative->participation in business venture? Courts are hesitant to find such arrangements to be for minor’s benefit

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