Lecture 4 BFA601 Semester 1 2018.pptx

To understand the agreement consider persons who are

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to understand the agreement, consider: persons who are mentally ill; intoxicated persons; bankrupts; minors; companies; aliens; prisoners; and married women. CAPACITY TO CONTRACT (4.108) CAPACITY TO CONTRACT (4.108)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis A persons is mentally ill if they are institutionalised, or they are under the care of a guardian administrator or from any reasonable view, the person is mentally ill. Mentally ill persons are bound by contracts for necessaries, but not for other agreements (luxuries) unless it can be proven the person understands the contract The burden of proof as to lack of understanding is on the mentally ill person – on proof the contract becomes void York Glass Co Ltd v Jubb [1925] CAPACITY TO CONTRACT Mentally ill persons (4.109) CAPACITY TO CONTRACT Mentally ill persons (4.109)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis Similar tests and law applies to intoxicated persons as it does to mentally ill Blomley v Ryan (1956) CAPACITY TO CONTRACT Intoxicated persons (4.112) CAPACITY TO CONTRACT Intoxicated persons (4.112)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis Once declared bankrupt, an undischarged bankrupt has particular restrictions on their capacity to make contracts, e.g. $5,155, or more on a contract requires disclosure of being an undischarged bankrupt. Bankrupts cannot be company directors. CAPACITY TO CONTRACT ) Bankrupts (4.113) CAPACITY TO CONTRACT ) Bankrupts (4.113)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis A company is a separate legal entity: s 124 CA A company has contractual capacity in the same way as a natural person A company contracts through its agents (s 126), who bind the company with outsiders: ss 128 & 129 Companies are liable for contracts which breach their own constitution: s 125 Pre registration contracts will make a company liable, or the party who made the contract if the company never registers CAPACITY TO CONTRACT) Companies (4.114) CAPACITY TO CONTRACT) Companies (4.114)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis Prisoners Prisoners generally have no legal restrictions on their capacity, under common law there is a restriction on prisoners condemned to death. CAPACITY TO CONTRACT Other parties (4.117) CAPACITY TO CONTRACT Other parties (4.117)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis Legislation in Australia determines that an adult is 18 years of age. Children (infants) who are under the age 18 are liable for necessaries and beneficial contracts of service, but not for luxuries. CAPACITY TO CONTRACT Minors (4.119) CAPACITY TO CONTRACT Minors (4.119)
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© 2014 Reed International Books Australia Pty Limited trading as LexisNexis A necessary is something without which the individual minor cannot reasonably exist in their current environment.
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