Download Legal Capacity: Minors, Impaired Persons, and Misrepresentation and more Slides Civil Law in PDF only on Docsity! PATENT WENO N
Quote of the Day “I am not young enough to know everything.” J.M. Barrie, British playwright Docsity.com Minors -- Exceptions • Fully Executed Contracts – In some states, minors may not disaffirm fully executed contracts. • Timing – Minors may disaffirm a contract up to a reasonable time after turning 18, unless they ratify the contract after turning 18. Docsity.com Minors -- Exceptions • Necessaries – A necessary is something essential to the minor’s life and welfare. – On a contract for necessaries, a minor must pay for the value of the benefit received. • Misrepresentation of Age – Some states will not allow a minor to disaffirm if he has lied about his age. – Other states allow the minor to receive only the value of the returned goods. Docsity.com Mentally Impaired Persons • Definition – A person with mental illness or defect, who is unable to understand the nature and consequences of a transaction. – Generally creates only a voidable contract. • Intoxication – When an intoxicated person makes a contract, it is voidable. • Restitution – A mentally infirm party who seeks to void a contract must make restitution. Docsity.com Plaintiff’s Remedy for Misrepresentation or Fraud • If the maker’s statement is fraudulent, the injured party generally has a choice of rescinding the contract or suing for damages. • Sale of Goods – UCC §2-721 permits a party to rescind a contract and then sue for damages whether the misrepresentation was fraudulent or innocent. Docsity.com Nondisclosure of a Fact • Is misrepresentation only: – To Correct a Previous Assertion – To Correct a Basic Mistaken Assumption • A seller must report any known latent defect that the buyer is not expected to discover himself. – To Correct a Mistaken Understanding about a Writing – In A Relationship of Trust • When one party naturally expects openness and honesty, based on a close relationship, the other party must act accordingly. Docsity.com Mistake -- Bilateral • A bilateral mistake occurs when both parties negotiate based on the same factual error. – If the parties contract based on an important factual error, the contract is voidable by the injured party. • Conscious Uncertainty – No rescission is allowed where one of the parties knows she is taking a risk. Docsity.com Economic Duress • In analyzing a claim of economic duress, courts look at these factors: – Acts that have no legitimate business purpose – Greatly unequal bargaining power – An unnaturally large gain for one party – Financial distress for one party Docsity.com “Both parties must have the capacity to make a deal, and both must give genuine consent.” Docsity.com
