BLRB14 - Business Law and the Regulation of Business...

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Unformatted text preview: Business Law and the Regulation of Business Regulation Chapter 14: Contractual Capacity Chapter By Richard A. Mann & Barry S. Roberts Topics Covered in this Chapter Topics A. Minors B. Incompetent Persons C. Intoxicated Persons Minors s s s s Definition – persons who are under the age of majority (usually 18 years). of Liability on Contracts – a minor's contracts are voidable at the minor's option. are Disaffirmance – avoidance of the contract; may be done during minority and for a reasonable time after reaching majority. reasonable Ratification – affirmation of the entire contract; may be done upon reaching majority. majority. Minors s s s Liability for Necessaries – a minor is liable for the reasonable value of necessaries (items that reasonably supply a person's needs). needs). Liability for Misrepresentation of Age – prevailing view is that a minor may disaffirm the contract. the Liability for Tort Connected with Liability Contract – if a tort and a contract are so Contract intertwined that to enforce the tort the court must enforce the contract, the minor is not liable in tort. liable Incompetent & Intoxicated Persons Incompetent s s s Person under Guardianship – contracts made by a person placed under guardianship by court order are void. guardianship Mental Illness or Defect – a contract entered into by a mentally incompetent person (one who is unable to understand the nature and consequences of his acts) is voidable. voidable. Intoxicated Persons – a contract entered into by an intoxicated person (one who cannot understand the nature and consequence of her actions) is voidable. consequence Contractual Incapacity Contractual Reason for Incapacity Minority Effect on attempt to make a contract Voidable Mental illness or defect Guardianship for incompetency Intoxication Voidable Void Voidable ...
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