LAW CHAP 9

• Does a minor have the capacity to enter into an enforceable contract ?

  Minors under 18 lack the capacity to make a contract
• What does it mean to disaffirm a contract ?


  A party who decides they don't want to be bound by the contract anymore.
• Contractual capacity


  The legal ability to enter into a contractual relationship
• Age of majority


  when a person is no longer a minor
• Minority status can be terminated by a minors ?

  emancipation (the act of being freed from parent control)
• What contracts can minors generally enter into?

  Minors can enter same contracts as adults can but there are some they're not allowed to make by law.
• Under what circumstances will courts enforce a covenant not to compete ?

  sale of on going business

  and

  employment contract
• Covenants not to compete and the sale of an ongoing business

  A covenant not to compete is a promise made by one party in a contract to not start a similar business for a specific period of time and within a certain area
• Covenants Not to compete in employment contracts

  Noncompete agreements are deals between employees and employers where the employee agrees not to compete with the employer for a certain time
• What are the elements of fraudulent misrepresentation ?

  - Someone has to lie about something important.

  - They need to intend to deceive.

  - The person being lied to must believe the lie and act on it.

  - the party has to suffer some harm because of the lie.
• What types of contracts must be in writing to be enforceable ?

  - contracts involving land

  - Contracts that can't be completed within one year from the day after they're made.

  - promises to pay someone else's debt if they don't.

  - Promises made in exchange for getting married.

  - contracts for the sale of goods that cost $500 or more.
• Ratification


  Turning something that couldn't be enforced into something that can be legally enforced and must be followed.
• parents liability


  Parents aren't responsible for contracts made by their children when the children act independently.
• Is a contract entered into by an intoxicated person voidable or valid?

  A contract made by someone who is intoxicated can be canceled or it can be considered valid and enforced
• What makes a contract unenforceable for an intoxicated person ?

  If someone was really drunk and couldn't think clearly the contract they made can be voidable
• When an Intoxicated person understands the legal consequences of the agreement

  The contract is enforceable
• Mentally Incompetent Persons


  Contracts made by mentally incompetent persons can be void, voidable, or valid
• For a contract to be valid and enforceable it must

  formed for a legal purpose
• contract that is prohibited by federal or state law is

  illegal and can't be enforced
• Usury


  charging an illegal rate of interest
• Contracts Contrary to statute


  Contracts that go against the law
• Contracts contrary to public policy

  Contracts that go against what society thinks is fair or right.
• Contracts in restraint of trade

  Contracts that limit competition.
• Enforcement problems


  Rules about whether you can enforce agreements not to compete are different in each state
• In what state can't you enforce agreements not to compete ?

  California
• Reformation


  Changing a written contract by court order to show what the parties really meant.
• Procedural Unconscionability


  Contracts with tricky language, tiny print, or ones you didn't have time to understand are common in deals where big companies hold most of the power.
• Substantive Unconscionability


  This happens when contracts, or parts of them, are really unfair or too harsh.
• Unconscionable contracts or clauses


  contracts that are extremely unfair or unreasonable.
• Exculpatory clauses


  Exculpatory clauses are parts of contracts that try to let one party off the hook if something bad happens
• Exculpatory clauses in rental agreements and at work are based on ?

  what's fair or right for the public.
• when are exculpatory clauses enforced ?

  when they are deemed fair and reasonable by the court
• when will courts uphold exculpatory clauses ?


  if they're fair, follow the rules, and don't let people off the hook for doing something really wrong on purpose.
• who is at fault with illegal contract ?

  both parties equally at fault
• indivisible contract


  both parties have to fulfill all parts of the contract, even if it seems like there are separate sections.
• what happens when a party uses fraud, duress, or undue influence to induce another party ?


  the 2nd party will be allowed to recover for the performance or its value
• how can a contract be canceled ?

  If there was a mistake about the facts involved, not just about how valuable something is or its quality.
• Unilateral mistakes


  Errors made by only one party in a contract.
• In unilateral mistakes who can the contract be enforced against ?

  the party who made the mistake
• exceptions of unilateral mistakes


  The other person knew or should've known about the mistake, which was a big math error made accidentally without being extremely careless.