Business Law- Chapter 12 Flashcards Preview

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Flashcards in Business Law- Chapter 12 Deck (26):
1

Minor

A person who has not reached the age of majority.

2

Infancy Doctrine

A doctrine that allows minors to disaffirm (cancel) most contracts they have entered into with adults.

3

Disaffirmance

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.

4

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.

5

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.

6

Rarification

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.

7

Emancipation

The act or process of a minorvoluntarily leaving home and living apart from his or her parents.

8

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.

9

Legal Insanity

A state of contractual incapacity, as determined by law.

10

Adjudged Insane

Declared legally insane by a proper court or administrative agency. A contract entered into by a person adjudged insane is void.

11

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.

12

Intoxicated Person

A person who is under contractual incapacity becuase of ingestion of alcohol or drugs to the point of incompetence.

13

Illegal contract

A contract that has an illegal object.

14

Usury law

A law that sets an upper limit on the interest rate that can be charged on certain types of loans.

15

Gambling Statutes

Statutes that make certain forms of gambling illegal.

16

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.

17

in pari delicito

A situation in which both parties are equally at fault in an illegal contract.

18

Contract Contrary to Public Policy

A contract that has a negative impact on society or that interferes with the public's safety and welfare.

19

Immoral Contract

A contract whose objective is the commission of an act that society considers immoral.

20

Contract in Restraint of Trade

A contract that unreasonably restrains trade.

21

Licensing Statute

A statute that requires a person or business to obtain a license from the government prior to engaging in a specified occupation or activity.

22

Regulatory Statute

A licensing statute enacted to protect the public.

23

Revenue-raising Statute

A licensing statute with the primary purpose of raising revenue for the government.

24

Exculpatory Clause

A contractual provision that relieves one (or both) of the parties to a contract from tort liability for ordinary negligence.

25

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.

26

Unconscionable Contract

A contract that courts refuse to enforce in part or at all becuase it is so oppressive or manifestly unfair as to be unjust.