Flashcards in Business Law- Chapter 12 Deck (26):
A person who has not reached the age of majority.
A doctrine that allows minors to disaffirm (cancel) most contracts they have entered into with adults.
The act of a minor to rescind a contract under the infancy doctrine. Disaffirmance may be done orally, in writing, or by the minor's conduct.
Minor's Duty of Restoration
A rule which states that a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmation.
Competent Party's Duty of Restitution
A rule which states that if a minor has transferred money, property, or other valuables to the competent party before disaffirming the contract, that party must place the minor in status quo.
The act of a minor after the minor has reached the age of majority by which he or she accepts a contract entered into when she was a minor.
The act or process of a minorvoluntarily leaving home and living apart from his or her parents.
Necessaries of Life
Food, clothing, shelter, medical care, and other items considered necessary to the maintenance of life. Minors must pay the resonable value of necessaries of life for which they contract.
A state of contractual incapacity, as determined by law.
Declared legally insane by a proper court or administrative agency. A contract entered into by a person adjudged insane is void.
Insane but not Adjudged Insane
Being insane but not having been adjudged insane by a court or an administrative agenct. A contract entered into by such person is generally voidable. Some states hold that such a contract is void.
A person who is under contractual incapacity becuase of ingestion of alcohol or drugs to the point of incompetence.
A contract that has an illegal object.
A law that sets an upper limit on the interest rate that can be charged on certain types of loans.
Statutes that make certain forms of gambling illegal.
Effect of illegality
A doctrine which states that the courts will refuse to enforce or rescind an illegal contract and will leave the parties where it finds them.
in pari delicito
A situation in which both parties are equally at fault in an illegal contract.
Contract Contrary to Public Policy
A contract that has a negative impact on society or that interferes with the public's safety and welfare.
A contract whose objective is the commission of an act that society considers immoral.
Contract in Restraint of Trade
A contract that unreasonably restrains trade.
A statute that requires a person or business to obtain a license from the government prior to engaging in a specified occupation or activity.
A licensing statute enacted to protect the public.
A licensing statute with the primary purpose of raising revenue for the government.
A contractual provision that relieves one (or both) of the parties to a contract from tort liability for ordinary negligence.
Covenant not to Compete
A contract which provides that a seller of a business or an employee will not engage in a similar business or occupation within a specified time following the sale of the business or termination of employment.