Capacity

Question 1

When is a contract voidable?

Answer 1

Voidable contract is when a contract can be set aside by one party. EX:
-Minors
-Incompetency

Question 2

When is capacity considered?

Answer 2

Capacity is considered at the time of the contract formation
-The burden of proof is on the person alleging they are incompetent
-This sets the contract aside or makes it voidable
-There is a presumption of capacity

Question 3

What does it mean to disaffirm a contract?

Answer 3

Repudiation. A person has made a statement and a contract may have been formed but now the person is disaffirming the contract on the basis of incompetence.

Question 4

What does it mean to ratify a contract?

Answer 4

A contract was set aside based on incompetence but the person is now competent and and wants to pursue the contract

Question 5

Contracts with minors are voidable. What does that actually look like?

Answer 5

1. The adult is bound to the contract, the minor is not.
   -The minor can void a contract and return goods in their possession (Replevin)
2. Contracts for necessaries cannot be disaffirmed
   -Liable in quasi contract to establish fair value
3. Disaffirmance - notify that is void or set aside
4. If the contract is executory
   -Disaffirm
   -Stop performance
   -You cannot ratify as a minor (one a minor is of age (reach majority), then they can ratify. Payments after majority are considered ratification)
5. Misrepresentation of age
   -Misrepresentation = tort (tort does not equal contract)

Question 6

If individuals have not made majority until the age of 18 with one exception. What is this exception?

Answer 6

If they are married

Question 7

What is Replevin

Answer 7

To recover personal property wrongfully withheld by a third party

Question 8

What are necessaries that cannot be disaffirmed in an incompetency case

Answer 8

Food, shelter, clothing, and medical

Question 9

Describe contracts for those under the influence

Answer 9

1. Voluntary -A person knows they are intoxicated
   -No action; cannot disaffirm
   -Unless the person contracting with them knows their state and attempts to contract because of it; take advantage
   2.Involuntary - drugged; rohiphnol; forced intoxication

Question 10

Mental health procedures act is classified for those who are a danger to themselves or other. What are the procedures for mentally incompetent individuals

Answer 10

1. Guardianship
   -If a person cannot function in life or financial affairs
2. Adjudicated incompetent - void contract
3. Not adjudicated - voidable contract
4. Power of attorney

Question 11

What are the three different types of guardianship that are administered for mentally incompetent individuals

Answer 11

1. Guardianship of estate - finances
2. Guardianship of person - daily living and necessities
3. Plenary - both

Question 12

What does adjudication mean?

Answer 12

Found by a court to be incompetent

Question 13

What is the Power of Attorney?

Answer 13

Alternative to guardianship; give some of the powers with a provision that if guardianship is required “I want X person to do it”