Contractual Capacity Chapter 7 Pages 144-157 Ch 7 Capacity

POINTS TO PONDER Have you ever entered a contract and then reconsidered your choice? Make a list of as many things as you can think of that would give a person the capacity to contract.

LEGAL AGE CAPACITY When does a person legally turn 18? Pg 148 LEGAL ABILITY TO ENTER A CONTRACT Under the age of 18 What did the age of majority used to be? 21 years old When does a person legally turn 18? Pg 148

Why Does the Law Permit Minors to Rescind their Contracts? Protection from adults inexperienced

What is a Minor? Under the age of 18 What did the age of majority used to be? 21 years old

Which types of minors are held responsible for their contracts? Emancipated Not under control of parents Married Individuals who leave home abandon rights of a minor.

Misrepresentation of Age What happens if you enter an agreement as a minor yet claimed to be of age? This is Fraud You will be responsible and may be sued Why do you think the law prohibits minors from purchasing alcohol? Protection, lack of maturity, & judgment

Some states may deduct some money for damages. Can minors disaffirm a contract even if they have damaged the item purchased? YES. Some states may deduct some money for damages.

DISAFFIRM Act Statement VOIDABLE CONTRACTS Minors may disaffirm their contract. DISAFFIRM Act Statement Return Merchandise Disaffirm in writing pg 153 Disaffirm the entire contract All or none

Disaffirming Contracts Put in Writing Include: Sellers name & address Minors Name Date & Place of contracting Time & Place of Return

You want to start a band with other minors can you enter a legally binding contract? What can you do to make the agreements binding? Get parents to sign on behalf of the minor.

Ratify or Approve What happens if you buy a car as a minor and still owe money on it after you become an adult? Do you have the rights of a minor still or an adult? By keeping, using, or selling products after reaching the age of majority, you ratify the contract.

Ratify or Approve Orally In writing Actions Using Item Making Payments

Colleen bought a car as a minor Colleen bought a car as a minor. She paid a down payment and promised to pay installments over the next two years. After she reached 18 she continued to make payments. The act of making payments was a ratification. She could no longer return the car.

Contracts for Necessaries Minors are held responsible for necessaries. Courts must prove item was a necessary & that parents weren't adequately providing for the child. Food, clothing, shelter, & medical care Read example 3 pg 156

Exceptions to capacity Rule In Some Sates Life or Car Insurance Business in their name

Imagine you were a pop star How might your ability to sign contracts affect you? (financially etc..)