ch. 14 - incapacity Flashcards
midterm prep
types of incapacity
- minor incapacity
- mental incapacity
- intoxication
minor incapacity
minor has the right to disaffirm the contract at any time before reaching the majority and for a reasonable time thereafter
minor incapacity exception
- necessities of life
ex. food, water, shelter, etc. - where minor misrepresents his age
- where minor willfully harms the property that is the subject of the contract
- stat exceptions, such as student loans, insurance, and certain employment contracts
minor incapacity consideration
upon voiding the contract, minor gets back consideration
EXCEPT: if tort or necessity
minor reaffirming
a minor will be deemed to have reaffirmed the contract through conduct if they do not disaffirm w/in a reasonable time
mental incapacity
contracts are voidable by a party if the party by reason of mental illness or defect was incompetent at the tie of contract formation
mentally incapacitated reaffirming
pon becoming lucid the incompetent party may reaffirm
mental incapacity exceptions
- contract has been performed in whole or part
- the other party did not know of the mental illness or defect
- the contract is on fair terms
cognitive test (traditional/majority)
whether the person involved had sufficient mental ability to understand in a reasonable manner the nature and consequences of the transaction
volitional test (modern/minority)
Person lacks capacity to contract if:
1. They are unable to act reasonably in the transaction
2. The other party knows of this condition
mental incapacity restitution
party generally has to make restitution unless other party took advantage
intoxication
a person who is SO intoxicated as to be unable to understand in a rsbl manner the nature and consequences of the transaction
intoxication test
the only test is the cognitive test
intoxication scrutiny
courts are less likely to allow the intoxication defense
