Capacity to Contract

Capacity to Contract Capacity – legal ability to enter a contract Majority – age of legal adulthood Minor – not yet reached legal age (minority) NC Age of Majority = 18 years old Voidable Contracts – minors may disaffirm or avoid their contracts if they so choose Infancy = minority = minor = under 18 yrs old

Capacity to Contract Returning Merchandise – must be returned if disaffirming a contract Tender – offer to return Misrepresenting Age – fraud - if contract disaffirmed, you may be sued for fraud

Capacity to Contract Disaffirming the Whole Contract - can’t disaffirm parts of a contract -- must disaffirm all or none Disaffirming Contracts made with Minors – both can disaffirm contact

Ratification of Contracts with Minors Ratify – approve contract - after reaching majority age, a minor can ratify a contract made while he or she was a minor - ratification ends all rights given to a minor Contracts for Necessaries – necessities – food, clothing, shelter, and medical care - responsible for the fair value of item

Ratification of Contracts with Minors Special Statutory Rules – minors have capacity to buy car/life insurance - married = adult - limited capacity if you own a business - renting apartment is a necessity

Other Contractual Capacity Rules Mentally impaired persons – if declared insane: Prior to guardian being appointed – Contract is voidable After guardian appointed - all contracts are void Intoxicated person – must not understand the purpose, nature, or effect of the transaction - fair value of necessities

Other Capacity Limitations Convicts have certain limitations Aliens – people who live in U.S. but own allegiance to a different country - limited capacity ex: war