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Chapter 5 Elements of a Contract

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Presentation on theme: "Chapter 5 Elements of a Contract"— Presentation transcript:

1 Chapter 5 Elements of a Contract

2 Requirements of Capacity
What people may not be able to enter into a contract? People with mental impairments Minors Intoxicated persons Aliens, citizens of another country

3 What does it mean to reach the age of majority?

4 What does it mean to be emancipated?

5 Minors Contracts made by a minor are voidable by the minor.
Minors have the right to disaffirm or avoid their contracts if they choose. Return merchandise within reasonable time Minors may be searched at school for any reason! Freedom of speech is not so free at schools. Why?

6 Parents and Guardians Parents have the right to discipline their children and manage their children's property. Adoptive parents have the same rights. Cannot abuse those rights. The law protects children through the parents patriae

7 Parents and Guardians Parents have the duty to provide the necessities. If minors are forced to purchase the necessities on their own, the parents are liable for that contract. If emancipated, a parental duty comes to an end. Parents can name a guardian in a will. This person will look after the child as a parent.

8 Agreements that Break Statutes

9 Usury Statutes Usury is charging more than the maximum legal interest rate. The Truth in Lending Act make consumers aware of the cost of borrowing money. Must clearly state the annual percentage rate to borrower.

10 Gambling Statutes If you win money gambling but have trouble collecting, the court will not enforce the debt, and may consider you to be in violation of the law. Giveaway games by stores and businesses for promotion are legal as long as you are not required to buy a ticket.

11 Sunday Statutes Also called blue laws.
An offer made on a day other than Sunday, but accepted on Sunday, is void.

12 Licensing Statutes Requiring a license to do certain jobs.
Licenses protect people from dealing with unqualified people.

13 Elements of a Written Contract
Letter, sales slip, an invoice, or several words placed on a check. Must identify the place, date, parties, subject matter, prices and terms, and intent of the parties. Should also contain the signature of the party who may be charged.

14 Contracts that MUST be in writing
Contracts to pay someone else's debt Contracts to pay debts of a person who has died Contracts requiring more than a year to perform Contracts in consideration of marriage Contracts for the sale of goods Contracts to sell real property.

15 Real-World Have you been asked to sign a blank invoice? Sales slip?
Don't sign it unless you completely understand it! Ask for clarification Make changes, if necessary Refuse to sign?

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