Chapter 14

Question 1

Contractual capacity

Answer 1

The legal ability to enter into contract. The threshold material capacity required by law for a party who enters into a contract to be bound by that contract

Question 2

Minors are sometimes referred to as

Answer 2

Infants

Question 3

Age of majority

Answer 3

The age at which an individual is considered legally capable of conducting himself or herself responsibly.

• full rights of citizenship
• 18 years old

Question 4

Emancipation

Answer 4

The act of being freed from parental control

- terminates minority status

Question 5

Disaffirmance

Answer 5

The legal avoidance or setting aside of a contractual obligation

Question 6

Exceptions to A minors right to disaffirm

Answer 6

Misrepresentation of age
Contracts for necessaries
(Marriage and contracts to enlist)

Question 7

Necessaries

Answer 7

Necessities required for life such as food, clothing, shelter, medical attention

Question 8

Ratification

Answer 8

The act of accepting and giving legal force to an obligation that previously was not enforceable

Question 9

Express ratification

Answer 9

When the individual reaches the age of majority, and then they orally or in writing state that they intend to be bound

Question 10

Implied ratification

Answer 10

When the minor on reaching age of majority indicates an intent to abide by the contract

Question 11

Intoxication

Answer 11

If the person was intoxicated enough to lack mental capacity then the agreement is voidable

If the person was intoxicated and still understood the legal consequences the contract is enforceable

Question 12

Disaffirmance while intoxicated

Answer 12

You can disaffirm a contract while intoxicated and for a reasonable amount of time after becoming sober

Question 13

Ratification while intoxicated

Answer 13

A person can ratify a contract after becoming sober

Question 14

When are contracts with mentally incompetent people valid

Answer 14

If they had capacity at the time the contract was formed

Question 15

Usury

Answer 15

Charging an illegal rate of interest

Question 16

Contrary to public policy

Answer 16

Contracts that are not enforceable bc of the negative impact they would have on society

Question 17

Contracts in restraint of trade

Answer 17

Contracts that affect the public policy that favors competition in the economy

Question 18

Covenant not to compete

Answer 18

A contractual promise to refrain from competing with another party for a certain period of time and within a certain geographic area

Question 19

Reformation

Answer 19

A court ordered correction of a written contract so that it reflects the true intentions of the parties

Question 20

Unconscionable

Answer 20

A contract or clause that is void on the basis of public policy bc one party as a result of disproportionate bargaining power is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party

Question 21

Exculpatory clauses

Answer 21

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault

Question 22

in pari delicto

Answer 22

Both parties are considered to be equally at fault