Round 2 Lecture 7 (Contract Capacities)

Question 1

contractual capacity doctrine

Answer 1

• a contract is not formed unless the parties knowingly assent to its terms.
• need to protect those who are under recognized legal disability
• helps ensure voluntariness of contract

Question 2

when is assent lacking?

Answer 2

if the party is under a legal disability law which the law presumes impairs such knowing assent

Question 3

typical situations involving no capacity

Answer 3

contract is void:

• a person adjudicated incompetent
• children who have not reached the age of reason (7-10 years)

Question 4

typical situations involving persons with revocable contractual capacity

Answer 4

contract is not void, but voidable at option of person under the disability:

• minors
• incompetent persons
• extremely intoxicated persons

Question 5

minors have the right to dissafirm (avoid) contracts previously entered into

Answer 5

1. when: any time during minority or w/in reasonable time after reaching the age of majority
2. how: express or implied
3. minor must dissafirm in total and return consideration received in whatever condition it is in
4. types of contracts: minor is buyer, seller, recipient of services or provider of services

Question 6

extent of recovery for the minor for executory contracts

Answer 6

full recovery

Question 7

extent of recovery for the minor for executed contracts

Answer 7

majority rule: complete recovery

minority rule: charge the minor for any reduction in value or for the benefit of use (rent)