Anderson 19th Ed. 2005

Anderson 19th Ed. 2005

Chapter 14 CONTRACTS: CAPACITY AND GENUINE ASSENT Contractual Capacity An agreement that otherwise appears to be a contract may not be binding because one of the parties lacks contractual capacity. In such a case, the contract is ordinarily voidable at the election of that party who lacks contractual capacity. In some cases, the contract is void. Status Incapacity. Factual Incapacity.

2 Contractual Capacity Contractual incapacity is the inability, for mental or physical reasons, to understand that a contract is being made and to understand its general terms and nature. Incapacity may be due to: being a minor. Insanity. Intoxication. 3 Minors

Minors can avoid most contracts. Must be within reasonable time. Minor must return what had been received from the other party if the minor still has it. Minor must pay the reasonable value of a necessary. Restitution by Minor after Avoidance. Original Consideration Intact. Original Consideration Damaged/Destroyed. 4 Minors Recovery of Property. Contracts for Necessaries.

Ratification of Minors Voidable Contract. No Special Form of Ratification. Reasonable time after Emancipation. Contracts The Minors Cannot Avoid. Educational loans, medical care, court-approved, bank accounts, insurance policies. 5 Mentally Incompetent Persons The contract of an MI person is voidable to much the same extent as the contract of a minor. An important distinction is that if a guardian

has been appointed for the MI person, a contract made by the insane person is void (not merely voidable). 6 Intoxicated Persons An intoxicated person lacks contractual capacity to make a contract if the intoxication is such that the person does not understand that a contract is being made. 7

Unilateral Mistake Contracts may be avoided due to mistake by one or both of the parties. Unilateral Mistake. Mistake unknown to the other party usually does not affect the binding character of the agreement. A mistake known to the other contracting party makes the contract avoidable by the victim of the mistake. 8 Mutual Mistake Mutual Mistake: When both parties are mistaken

about a basic, material fact of the contract, the adversely affected party may avoid the contract. Reformation for Mistake in Transcription or Printing of the Contract. 9 Deception Innocent misrepresentation: there is a trend to allow it as a ground for avoiding the contract. Fraud: When concealment goes beyond silence and consists of actively hiding the truth, the conduct is fraud rather than nondisclosure.

Statements of Opinion are not fraud. Contract is voidable by the innocent person. 10 Deception Nondisclosure. General Rule: There is no legal duty to volunteer information to the other party. Exceptions:

Serious Defect that could not be discovered. Confidential Relationship. Active Concealment. 11 Pressure The free will of a person, essential to the voluntary character of a contract, is lacking if the agreement is obtained by pressure. Contract is voidable. Undue influence: where the beneficiary of the contract is in a position of extreme power over the maker of the contract. Duress:

Physical Duress: Threat of physical force that would cause serious personal injury or damage to property. Economic Duress: against free will. 12 Review Lack of Contractual Capacity Possible Grounds for Avoiding

Contract Mistake Status Incapacity Minors Factual Incapacity Intoxication Unilateral Induced by/Known to Other Party

Mental Mutual Mistake Innocent Misrepresentation Deception Nondisclosure Fraud Undue Influence Pressure Duress

Physical Economic 13

Recently Viewed Presentations

  • Pyramid (Authors) - Georgetown High School

    Pyramid (Authors) - Georgetown High School

    Pyramid Think Math Vocabulary 5th Grade Chapter 7-Decimals. Benchmark fractions. 1. difference. billions. millions. Place value. round. Decimal part of a number
  • Foliage Penetration SAR (FOPEN) Brandon Ravenscroft

    Foliage Penetration SAR (FOPEN) Brandon Ravenscroft

    Early battlefield surveillance systems operated in X-Band (8 to 12 GHz). Not useful for foliage penetration. FOPEN SAR first developed during Vietnam conflict to detect moving equipment and soldiers on ground under forests. First development credited to two University of...
  • Psych 270 Group Dynamics

    Psych 270 Group Dynamics

    Psych 272 Group Dynamics
  • Private Cloud Service Delivery and Automation with Microsoft ...

    Private Cloud Service Delivery and Automation with Microsoft ...

    Private Cloud Service Delivery and Automation with Microsoft System Center 2012. ... Standardization, Self Service & Automation. ... Private Cloud Service Delivery and Automation with Microsoft System Center 2012
  • Chapter 3: Part II Water and Soil Corrosion

    Chapter 3: Part II Water and Soil Corrosion

    Because these lines need to handle differing amounts of liquid depending on the power load, they are only wetted along the bottom (6 o'clock position). This corrosion is sometimes called condensate channeling in the power-generation business. ... Slime-forming bacteria.
  • Chapter 6: Biomes and Aquatic Ecosystems

    Chapter 6: Biomes and Aquatic Ecosystems

    Explain what biomes and aquatic ecosystems are. Explain how biomes are characterized. Describe how net primary productivity varies among biomes. Give an introduction to your Biome Project. Give an example of your Biome Project
  • Systematic Transformation Development

    Systematic Transformation Development

    Motif-Core. DEVS. T-Core. MoTif-Core. Embed each T-Core primitive in the state of its corresponding atomic DEVS. Packets encoded as events (reference, copy) Composer modelled as a coupled DEVS. Multi-Paradigm Foundation for MTL Engineering. Proposal Exam
  • University of Birmingham - ISUAbroad

    University of Birmingham - ISUAbroad

    If your adviser happens to be out of the country, talk to Liam Grover. Get Dr. Grover's phone number from Helen and call him - do not plan to wait on email, even though Dr. Grover is pretty quick to...