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CAPACITY2.01 C
Understanding Contract Law
Understand elements and characteristics of a contract
Have you ever wondered what capacity is?
Probably not? But when looking at a contract you need to be able to identify what Capacity is. So lets take a look at Capacity!
CAPACITY
Legal ability to enter into a contract
• Minors• Mentally Incapacitated• Intoxicated
A person serving a prison sentence lacks capacity.
MINORS
Minor – not yet reached legal age (age of majority)
NC Age of Majority – 18 years old
Emancipation - severing of the parent-child relationship Formal – court decree Informal – arises from the conduct of the minor and the parent
Parent and minor agree that parent will end support Minor gets married Minor moves out of family home Minor joins armed forces Minor gives birth Minor takes on full-time employment
Ratification – agreeing to be bound by a contract that could be avoided Contracts made by minors are voidable; minors may disaffirm (or avoid
being bound by) contracts
MENTALLY INCAPACITATED
Lacking the ability to understand the consequences of his or her contractual acts
Severe mental illness
Severe mental retardation
Severe senility
Contracts made by mentally incapacitated are usually void unless involving necessaries.
INTOXICATED
People under the influence of drugs or alcohol
Intoxication is a voluntary act.
Most courts are reluctant to consider contracts entered into by intoxicated individuals as voidable.
Must be so intoxicated that the person did not know they were contracting.