Capacity Flashcards
(22 cards)
What is the general rule regarding a person’s capacity to enter into a contract?
A person without capacity is unlikely to be bound by a contract.
Who are considered to have limited capacity to contract?
Children, those who are mentally ill, and others temporarily lacking mental capacity.
At what age do persons generally have full contractual capacity?
Persons over the age of 18.
What are the two main exceptions for minors binding contracts?
- Necessaries
- Contracts of employment, apprenticeship, or education.
What does a minor need to pay for necessaries?
A reasonable price.
What types of items are considered necessaries for minors?
- Food
- Medicines
- Accommodation
- Clothing
- Items for real use not for comfort or pleasure.
What was the ruling in Nash v Inman regarding the 11 waistcoats?
The contract was not enforceable because the minor already had sufficient clothing.
Under what conditions can a minor bind themselves to a contract of employment?
If the contract is for their benefit.
What happened in Aylesbury Football Club v Watford Association Football Club?
The young footballer’s contract was not beneficial and could not be enforced.
Can a minor enforce a contract against the other party?
Yes, unless one of the exceptions applies.
What happens if a minor ratifies a contract after reaching 18?
The contract will be binding on them.
What defines a person lacking capacity under the Mental Capacity Act 2005?
They are unable to make a decision for themselves in relation to the matter at the time the contract is made.
What are the four impairments described under s 3(1) of the Mental Capacity Act?
- Unable to understand relevant information
- Unable to retain relevant information
- Unable to use relevant information
- Unable to communicate a decision.
What does the relevant information relate to according to s 3(4) of the Mental Capacity Act?
- Consequences of deciding one way or another
- Consequences of failing to make a decision.
What is the liability of a person without capacity for necessaries?
They remain liable to pay a reasonable price.
What must be established for a contract to be voidable due to incapacity?
- The person did not understand what they were doing
- The other party knew this.
What is the ruling in Imperial Loan Co v Stone regarding incapacity?
If incapacity is established, the contract will be voidable.
What happens to contracts made by drunken persons?
They are not bound by contracts made when they do not understand what they are doing.
What did Matthews v Baxter establish regarding intoxication and contracts?
An intoxicated person must pay a reasonable price for necessaries but is not bound by other contracts.
Which groups are protected by rules on capacity to contract?
- Children
- Mentally ill individuals
- Others temporarily lacking mental capacity.
What is the statutory definition of capacity for the purposes of the Mental Capacity Act?
It is specific to the Act but similar to contract law issues.
Fill in the blank: A person under the age of 18 is not generally bound by a contract unless it relates to _______.
necessaries.
