Chapter 14

Question 1

Age of majority

Answer 1

The age at which an individual is considered legally capable of conducting himself or herself responsibly. A person of this age is entitled to the full rights of citizenship, including the right to vote. In contract law, the age at which one is no longer an infant and can no longer disaffirm a contract.

Question 2

Contractual capacity

Answer 2

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

Question 3

Covenant not to compete

Answer 3

A contractual promise to reframe from competing with another party for a certain period of time and within a certain geographic area. Although covenants not to compete restrain trade, they are commonly found in partnership agreements, business sale agreements, and employment contracts. If they are ancillary to such agreements, covenant not to compete will normally be enforced by the court unless the time, or geographic area is deemed unreasonable

Question 4

Disaffirmance

Answer 4

The legal avoidance, or setting aside, of a contractual obligation

Question 5

Emancipation

Answer 5

In regards to minors, the act of being freed from parental control; occurs when a child’s parent or legal guardian relinquishes the legal right to exercise control over the child. Normally, a minor who leaves home to support himself or herself is considered emancipated

Question 6

Exculpatory Clause

Answer 6

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

Question 7

Necessaries

Answer 7

Necessities required for life, such as food, shelter, clothing, and medical attention; may include whatever is believed to be necessary to maintain a persons standard of living or financial and social status

Question 8

Ratification

Answer 8

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

Question 9

Reformation

Answer 9

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

Question 10

Unconscionable

Answer 10

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

Question 11

Usury

Answer 11

Charging an illegal rate of interest