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Contractual Capacity

Contractual Capacity. Chapter 7 Pages 144-157. 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. LEGAL AGE . CAPACITY. LEGAL ABILITY TO ENTER A CONTRACT.

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Contractual Capacity

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  1. Contractual Capacity Chapter 7 Pages 144-157 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 • 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. Can minors disaffirm a contract even if they have damaged the item purchased? • YES. • Some states may deduct some money for damages.

  9. VOIDABLECONTRACTS • 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. 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..)

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