Presentation on theme: "Capacity Rights page 156 chapter 10 Period 2 By;Simone Simpkins."— Presentation transcript:
Capacity Rights page 156 chapter 10 Period 2 By;Simone Simpkins
Do now Dan, who is 17 years old but looks 20 years old,signs a contract for $1000 stereo system from cascade stereos. The contract requires him to put $300 down and $50 monthly. He puts his $300 down.after two weeks decides he wants out of the contract. Can he legally do this? Why or why not.
Goals of capacity rights I. Explain the role capacity in organization. II. Identify parties who have contractual capacity. III. Identify what contracts can be disaffirmed.
Vocabulary Contractual capacity-Is the ability to understand that contract is being made and its general meanings Disaffirmance-involves giving back the consideration by both parties. Ratification-Acting towards the contract as though one intends to be bound by it. Emancipation-The serving of the child's parents relationship. Scope of authority-The range of acts the organization has authoritzed him or her do so.
Terms of contracts 1. Necessary-The standards for necessaries can vary from one person to another. Things contracted for must be suitable to that party's economic and social status. 2. Non-Necessaries-Those things not needed to maintain one’s economic or social status, like cosmetics,jewelry,liquor, Tobaco,perfume,audio equipment,travel for pleasure,and expensive food for parties are non necessary.
Capacity rights limitations Approving contracts –In all states minors cant void any contracts approved for them by court. Like minors who are actors and professional sports players. Major commitments-In all states contracts to enlist in the armed services and contracts for education loans cannot be disaffirmed. Banking contracts-In most states minors are permitted to make deposits in banks and in savings and loan associations. Most states also let minors make withdrawals as if they were adults.
True or false Each person in an organization has a scope of authority that determines which contracts by that person can bind the organization. True or false. The test of mental impairment is "Did the person understand the consequences of his or her contractual acts?”true or false
Which letter What is the common age of majority?a.21 b.18 c.16 d.9 Which contracts by those lacking capacity can be disaffirmed? a.Those for necessaries b.those for non necessaries c.those for necessaries or non necessaries.
When signing a contract You must not be A minor-In most states people under the age of 18 are legally minors or referred to as infants. Intoxicated-when using alcohol like beer and vodka,using drugs like marijuana or LSD,or inhaling products like glue or areosol. Mental capacity-Mental illness,severe mental retardation and severe senility.
Limitations cont. Insurance contracts-More than one half of the states provide that minors who are over a certain age may not disaffirm certain contracts of life insurance. Working contracts-In most states minors who engage in a business or trade cant disaffirm agreements involving their business. Loss value-In most states if minors are unable to return exactly what was received under the contract they can still get back everything they gave.
Goals of limitations Identify the time when a contract cannot be disaffirmed. Identify contracts that cannot be disaffirmed Explain the consequences of misrepresenting age.
Exit question Exit question While still a minor. Beach brought a stereo sound system on credit from McReam’s Electronic cloud for $500. Beach paid $100 down and promised to pay $50 a month on the unpaid balance until the debt was paid. After making four payments, two of which were made after he reached the age of majority. Beach decided to disaffirm the contract and return the equipment. Can Beach do this?