Chapter 14 - Capacity and Genuine Assent

Chapter 14 - Capacity and Genuine Assent - Chapter 14...

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Chapter 14 – Capacity and Genuine Assent I. Contractual Capacity i. Some persons lack contractual capacity, a lack that embraces both those who have a status incapacity and those who have a factual incapacity 1. Minors and persons insane b. Contractual Capacity Defined: i. Ability to understand that a contract is being made and to understand its general meaning 1. The fact that a person does not understand the full legal meaning of the contract doesn’t mean that contractual capacity is lacking c. Minors: i. Who is a Minor? 1. Any person, male or female, under 18 years of age ii. Minor’s Power to Avoid Contracts 1. A contract made by a minor is voidable at the election of the minor a. May affirm or ratify the contract on attaining majority by performing the contract, by expressly approving the contract, or by allowing a reasonable time to lapse without avoiding the contract 2. Time for Avoidance: a. A minor can disaffirm a contract only during minority and for a reasonable time after attaining majority iii. Restitution by Minor After Avoidance 1. When a minor disaffirms a contract, the question arises as to what the minor must return to the other contracting party a. Original Consideration Intact: i. When a minor still has what was received from the other party, the minor must return it or offer to do so 1. Status Quo Ante:
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a. Original positions of the parties b. Original Consideration Damaged or Destroyed: i. The minor’s right to disaffirm the contract is not affected
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This note was uploaded on 04/24/2011 for the course MGMT 354 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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Chapter 14 - Capacity and Genuine Assent - Chapter 14...

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