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Chapter 9 Legal Capacity to Contract

Chapter 9 Legal Capacity to Contract. By Kaitlyn Sutrick , Will Ahsmann , Josh Larson, Steven Geis , Zach Edwards. What is Capacity?. The ability to understand the consequences of a contract.

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Chapter 9 Legal Capacity to Contract

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  1. Chapter 9Legal Capacity to Contract By KaitlynSutrick, Will Ahsmann, Josh Larson, Steven Geis, Zach Edwards

  2. What is Capacity? • The ability to understand the consequences of a contract. • The law grants certain parties special contractual protections designed to keep them from being cheated due to their lack of capacity • Ex. Minors, Mental Impaired

  3. Minors Vocabulary • Age of Majority to Contract- The age at which a person is entitled to the management of his or her own affairs • Minor- A person who has not yet reached the age of majority • Minority- Minor part of a persons life (Under 18) • Emancipation- the severing of the child-parent relationship

  4. Protecting Minors • Minors contracts can be voidable unless they are bound to the contracts if they are emancipated • Evidence of formal emancipation • When court decrees the minor emancipated • Evidence of informal emancipation • Minor marries • Minor gives birth • Minor moves out • Minor has a full-time job • Minor becomes a member of the armed forces

  5. Mental Incapacitated Vocabulary • Mental Incapacity- Condition in which a party to a contract is unable to understand the consequences of the contract • Intoxication- Mental impairment caused by voluntary use of alcohol, drugs, or inhalants

  6. Protecting Mentally Incapacitated • People with severe illness, or severe senility lack capacity • A judge must rule if a person is mentally incapacitated, and if so all contracts executed by this person are void.

  7. Organization Capacity • People who work for a business must have the capacity to bind contracts. • Scope of Authority: within the range of contractual acts the organization has authorized him or her to be responsible for.

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