Flashcards in Final - Ch. 6 Capacity Deck (47):
A minor has no power to (1) a contract; after majority, the person can give (2) or (3) ratification stating he will not disaffirm the contract.
Person appointed to act in place and stead of another through an instrument called a Power of Attorney.
court has declared a person incompetent
Unlike disaffirmation of a contract with a minor, which can only be done expressly, (1) of a contract after 18 can be done (2) or (3).
2. expressly (in words say you want the contract to continue)
3. impliedly (continue paying; do nothing to disaffirm)
Guardian ad Litem
A court appointed person to serve as an advocate, usually for a child, and to act in the best interest of that child during a specific hearing or specific litigation.
Two types of competency. The (1) looks for a total lack of understanding--the contract (2) even if it is fair. The (3) looks for a person who has some understanding of the transaction but is unable to act reasonably in relation to that understanding--usually someone is (4) in this situation.
1. cognitive test (person buys a Rolex)
3. volitional test (person knows he needs a watch but gets talked into a Rolex - Purchase isn't one a reasonable person would make)
4. taking advantage
3 people who are given special protection from contract mistakes in the form of a right to avoid the contract
1. minors2. mentally incompetent3. some people under influence of intoxicating substances
(1) are viewed unsympathetically by courts in contract matters, the understanding is "your fault." But courts are aware of (2). The contract may be voidable if (3) AND (4). In other words, the law does not protect (5), but does protect those who get (6).
1. Intoxicated individuals
2. alcohol/drug abuse
3. the person was too intoxicated to understand the nature of the transaction
4. the other party knows about the intoxication
6. taken advantage of
Mental incompetence relates to (1)--for dimentia sufferers, competence can differ from day-to day.
1. when the contract is entered
If a minor improperly avoids a contract, courts are forgiving with minors as (1) and harsh with them as (2). Many courtrs require return of (3) but do not require (4). A minor may also not avoid a contract to (5).
4. restitution (e.g., if minor crashes a car, dealer is out of luck)
5. improve his position
Can a minor act as an agent?
Yes. If a minor acts as an agent for the benefit of an adult, the agent is party to the contract.
A cognitive test is easier when the person is (1) and has a (2) or (3).
1. adjudicated incompetent
3. power of attorney
True or False:
The exception to contracting with minors, in which the person can legally get the value from the contract, is for necessities, which are food, clothing and shelter.
Two things that must be proven with regard to necessities in enforceability of contract
1. Was the item a necessity (determined by courts, matter of law)
2. Was the item a necessity to the person (matter of fact)(e.g., a minor renting an apartment when her parents provide a home she is welcome in = not a necessity)
A person, the (1), who fears becoming incompetent will sometimes sign a (2) to appoint another to act as (3). A (4) remains valid despite principal's loss of mental capacity.
2. power of attorney
4. durable power of attorney
In some states, (1), (2) or (3) may either give a minor capacity or make the minor liable for more necessities.
incompetence has not been determined by a court (courts look at necessity and state of mind)(may have to make restitution if other person didn't know)
If a contract is disaffirmed by the minor, the other party does not have to return (1). Likewise, if the minor (2) from the transaction, that must be paid to the other party. However, if the minor (3) the property, too bad. The general idea of courts about contracting with minors is (4).
1. their benefit (e.g., payments made toward owning car)
2. profits (sells the car for more)
4. "do so at your own peril"
The inability to understand the nature and consequences of a transaction.
also known as indemnification, it is the act of making good or giving equivalent for any losses suffered.
Is a minor liable for restitution? Is an adult liable for restitution?
No, a minor is not liable for the value of the benefit received from the contract.
Yes, An adult must return everything that the minor gave them, to full value.
Incompetence, unlike age incapacity, is based on the parties' (1) state of mind. The objective comes in with (2). Courts will try to protect the (3), whether the contract is (4) or not.
2. experts (psychiatrists, etc.)
3. incapacitated person
A declaration that a minor is no longer under the care of custody of parents or a guardian.
Acknowledgement to honor a contract that is inferred from a party’s behavior, words and action.
make a contract void
Can a married minor get out of a contract?
No. A minor married to an adult is not under a legal disability--in the eyes of the law, she becomes an adult.
Things that are considered indispensible to life, such as food clothing and shelter
A minor can have liability under contracts for (1) under a theory similar to (2)
2. quasi-contract (quantum meruit)
When looking at whether an intoxicated person entered into a contract, courts will look at the (1), the (2), and the other party's (3) of the intoxication. They will also consider whether th intoxicated person ratified the contract by failing to (4) it when sober.
1. cause (bad reaction to rx)
Minors are always responsible for (1) and for (2).
1. student loans2. child support
Saying someone under 18 has no legal capacity to enter a contract is an (1) standard based on one's (2). It prevents (3) and protects minors from their own (4). For the sake of disaffirmation, whether the contract is (5) or not does not matter.
2. birth certificate
4. own decisions
If a person contracts with someone under 18, that person has the ability to (1). This right extends for a (2) beyond 18. Disaffirmation can be done only (3).
2. reasonable time
A parents' waiver to his child's injury is likely (1) as an (2)
1. unenforceable (ineffective)
2. exculpatory clause
True or False: Like minors, incompetents are liable for reasonable value of necessities and are capable of ratifying contracts when competent.
Cognitive test for competence
Mental incompetence determined by one’s inability to understand the overall nature and consequences of a transaction. A total lack of understanding.
A (1) is appointed to advocate for one particular case--usually this comes in where the actual guardian has a (2).
1. guardian ad litem2. conflict of interest
Generic title given to minors and incompetents.
mental incompetence shown by inability to act reasonable with respect to a transaction (courts generally consider whether other person was aware of the mental condition)
What does the AZ law require for emancipation?
In AZ it is very difficult to become emancipated
Must be at least 16 years old
Must show you have financial means to support yourself
Fully independednt from guardian
Must show you are being educated
If a minor lies, almost all jurisdictiosn allow the adult to (1) on the grounds of (2).
In most states a minor can (1) despite misrepresentation but may have to pay (2), especially since minors are liable for (3).
A (1) or his/her (2) or (3) typically has the power to avoid a contract, while the adult does not have the same power.
1. minor2. guardian3. administrator
Two types of guardianship are (1) and (2). A (3) "goes around" a guardianship, and causes appointment of an (4)--NOT the same thing as an actual attorney.
1. guardian (guards person)
2. conservatory (guards assets)
3. power of attorney
4. attorney in fact (stands in place of person)
A person or entity appointed to look after a person. A guardian of a person.
mental incompetence determined by inability to understand the nature and consequences of a transaction