Capacity Rights

 Showing that a party has the ability to understand a contract terms and their own actions.  Mental incapacity is the legal test which is used to show is a person can determine the consequences of their own actions.

 Minors (Anyone under the age of 18)  Emancipated Minors (Someone who has severed the relationship with parents)  Intoxicated people (Only if the intoxication made them make a decision they would not normally make)  Mentally incapacitated (Someone without the ability to learn or think through decisions)

 Being “Intoxicated” when you enter a contract is NOT always a defense  If a person was already showing they were interested in contracting, this defense cannot be used  Intoxication is a defense if it caused you to do something you would not normally do

 They do NOT have capacity (Ever)  If they (Or any protected party) purchases a necessary item, they are only required to pay “Fair Market Value”, rather than the price listed  Judging capacity rights “IS” based on your economic circumstances  Minors can disaffirm a contract “ANY TIME” while still incapacity.

 Anyone under the age of 18  They end their rights as minors when they turn 18  Treated as an adult at 18

RatificationDisaffirmance  Showing intent to be bound by a contract  Signature is best way to ratify  Binds the agreement  Means to give back or take back consideration by both sides  Must take place “prior” to ratification

 Necessaries are things needed to maintain life and lifestyle, like food, clothing and shelter  Non-necessaries are luxury items like cars, expensive jewelry or high expense items  Protected groups (Minors, mentally impaired and intoxicated) are protected against purchases of “Non-necessaries” by the law

 Some items are basic, like food  Some items are based and judged on a persons “Economic” status  Economic status means how much they can afford

Age of MinorityAge of Majority  Defined as the time between when you are born and when you turn 18  Defined as the time between the age of 18 and when you pass on

 The range of acts a person is given control over to make decisions for or do  Party given scope of authority “IS” liable if the business is not  Example) If a manager is allowed to sign off on deliveries to the store, they are given the “Authority” by the company to make the decisions and therefore “bind” the company

 The “Severing” of the child-parent relationship  Means the child (Minor) now has some rights as an adult  They are responsible for themselves

Formal EmancipationInformal Emancipation  A court ordered thing  Both parties must follow the courts decision  Completed through action  Ex) Getting married, having a baby, agree with parent, military, full time job

 A standard legal test done to show if a person has the ability to understand their own actions  Usually completed by a court psychologist  Challenges a person’s ability to make a contract on their own

 To take back consideration by both sides “Prior” to ratification  Minors can “disaffirm” a contract if its within a “REASONABLE” time after turning 18  Ratification- Means to show intent to be bound by a contract (Agreeing with party who you will contract with)

 YES- But only for necessary items  If a purchase is for a non- necessary (Luxury item) it CANNOT be ratified until the minor turns 18 (Reaches majority status)  Once you ratify a contract, you CANNOT back out (Need to sue)

 A new promise: Contacting the person who you entered the contract with and creating a new agreement that is now BINDING  An action: Good example would be making a payment on something after turning 18 or writing the person a letter or saying you want to stay in the contract

 They cannot keep the purchase and ask for their money back  If its damaged, they are “Still” entitled to get their money back, BUT the business or person they buy it from can attempt to sue them for damages  They are entitled to get ALL their money back

 Major Commitments- Military, college, marriage  Banking agreements  Insurance agreements  Property agreements  Work agreements  Court approved agreements  Some leases for an apartment rental (If Non-necessary)

 They are still protected under the law  Can disaffirm  Can get all their money back  BUT, they can be charged with Fraud or Misrepresentation criminally or sued in a civil court for damages

 These are lawsuits  Any person (Even a child) is held responsible for their own actions therefore can be sued for damages  Collecting on a lawsuit with a minor is nearly impossible, but it can be done