capacity and genuine agreement. 6 parts to a contract offer acceptance capacity genuine agreement...
TRANSCRIPT
Capacity And Capacity And Genuine AgreementGenuine Agreement
6 parts to a Contract6 parts to a Contract
Offer AcceptanceCapacity Genuine Agreement Consideration Legality
Genuine AgreementGenuine AgreementA valid offer has been made by the offeror, and a valid acceptance has
been exercised by the offeree
MistakeMistake
Unilateral Mistake– An error on the part of one of the parties – Cannot get out of contract – Types:
Nature of the Agreement– Signing a contract you don’t understand or have not read – This applies to signing a contract in a language you don’t
understand Identity of a Party
– Bound by contract with face to face meetings – May be able to void a contract made NOT face to face
Bilateral Mistake (Mutual Mistake)– Both parties are mistaken– Types:
Possibility of Performance– Contract is impossible to perform Either party can void
contract
Subject Matter– Either party can void contract
FraudFraud
Deliberate deception for an unfair or unlawful gain – Deliberate: Done with or marked by full
consciousness of the nature and effects; Deception: The fact or state of being deceived
– Gain: To secure as profit or reward
In order to prove fraud, you must prove the above 3 definitions
Proving Fraud:1. False Representation of Fact
1. Must be a material (important) fact
2. Concealment (nondisclosure) may be considered false representation
2. Representation Known to be False
3. False Representation Intended to be Relied Upon
4. False Representation Actually Relied Upon
5. Resulting Loss
Innocent MisrepresentationInnocent Misrepresentation
Make an innocent statement of supposed fact that turns out to be false
Injured party has the right to rescind (take back) the offer No rights to damages
DuressDuress
Overcoming a person’s will by use of force or by threat of force or bodily harm
Economic Duress– Threats to a person’s business or income
Actual physical harm will void the contract Threat of physical harm will make contract
voidable A threat of exercising one’s legal right is NOT
duress Ex Threatening to sue someone and you have right to sue, is NOT duress
Undue InfluenceUndue Influence
Unfair and improper persuasive pressure within a relationship of trust
Match the column on left with Match the column on left with who they have undue who they have undue
influence over in the right influence over in the right column?column?
1. Doctor
2. Lawyer
3. Parents
4. Teacher
1. Student
2. Children
3. Client
4. Patient
Answers: 1-4, 2-3, 3-2, 4-1
Capacity to ContractCapacity to Contract
Capacity – legal ability to enter a contractMajority – age of legal adulthoodMinor – not yet reached legal age (minority)NC Age of Majority = 18 years oldVoidable Contracts – minors may disaffirm
or avoid their contracts if they so choose Infancy = minority = minor = under 18 yrs
old
Capacity to ContractCapacity to Contract
Returning Merchandise – must be returned if disaffirming a contract
Tender – offer to returnMisrepresenting Age – fraud
- if contract disaffirmed, you may be sued for fraud
Capacity to ContractCapacity to Contract
Disaffirming the Whole Contract - can’t disaffirm parts of a contract
-- must disaffirm all or none
Disaffirming Contracts made with Minors – both can disaffirm contact
Ratification of Contracts with Ratification of Contracts with MinorsMinors
Ratify – approve contract
- after reaching majority age, a minor can ratify a contract made while he or she was a minor
- ratification ends all rights given to a minor Contracts for Necessaries – necessities – food,
clothing, shelter, and medical care
- responsible for the fair value of item
Ratification of Contracts with Ratification of Contracts with MinorsMinors
Special Statutory Rules – minors have capacity to buy car/life insurance
- married = adult
- limited capacity if you own a business
- renting apartment is a necessity
Other Contractual Capacity Other Contractual Capacity RulesRules
Mentally impaired persons – if declared insane:Prior to guardian being appointed – Contract is
voidableAfter guardian appointed - all contracts are void
Intoxicated person – must not understand the purpose, nature, or effect of the transaction
- fair value of necessities
Other Capacity LimitationsOther Capacity Limitations
Convicts have certain limitationsAliens – people who live in U.S. but own
allegiance to a different country - limited capacity ex: war