1. Contractual Capacity
Chapter 7
Pages
Ch 7 Capacity

2. 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.

3. 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

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

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

6. 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.

7. 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

8. 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.

9. 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

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

11. 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.

12. 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.

13. Ratify or Approve
Orally
In writing
Actions
Using Item
Making Payments

14. 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.

15. 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

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

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