Transcript Power Point Chapter 14

CHAPTER 14: CONTRACTUAL CAPACITY
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TOPICS COVERED CHAPTER 14:
CONTRACTUAL CAPACITY
A. Minors.
B. Incompetent Persons.
C. Intoxicated Persons.
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MINORS
 Definition – persons who are under
the age of majority (usually 18 years).
 Liability on Contracts – a minor's
contracts are voidable at the minor's
option. 
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MINORS
 Disaffirmance – avoidance of the
contract; may be done during minority
and for reasonable time after reaching
majority.
• BERG V. TRAYLER (2007).
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MINORS
 Ratification – affirmation of the
entire contract; done upon reaching
majority.
• IN RE THE SCORE BOARD, INC. (1999).
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MINORS
 Liability for Necessaries – a minor is
liable for the reasonable value of
necessaries (items that reasonably
supply a person's needs).
• ZELNICK V. ADAMS (2002).
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MINORS
 Liability for Misrepresentation of Age
–minor may disaffirm the contract.
• KESER V. CHAGNON (1966).
 Liability for Tort Connected with
Contract – if a tort and a contract are so
intertwined that to enforce the tort the
court must enforce the contract, the minor
is not liable in tort.
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INCOMPETENT PERSONS
 Person under Guardianship –
contracts made by a person placed
under guardianship by court order
are void.
 Mental Illness or Defect – a contract
entered into by a mentally
incompetent person (one who is
unable to understand the nature and
consequences of his acts) is voidable.
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INTOXICATED PERSONS
 Intoxicated Persons – a contract
entered into by an intoxicated person
(one who cannot understand the
nature and consequence of her
actions) is voidable.
• FIRST STATE BANK OF SINAI V. HYLAND
(1987).
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INCAPACITY: MINORS,
INCOMPETENTS, AND INTOXICATED
Reason for Incapacity
Effect on attempt to
make a contract
Minority
Voidable
Mental illness or defect
Voidable
Guardianship for
incompetency
Void
Intoxication
Voidable
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