Business Law Chpt. 9

Vocabulary flashcards related to contractual capacity based on lecture notes.

Contractual Capacity

The ability to understand the consequences of a contract.

Minors

Individuals under the age of majority who lack the capacity to enter into contracts.

Mentally Impaired

Individuals whose mental faculties are impaired, affecting their capacity to contract.

Intoxication

being affected by alcohol or drugs, potentially impacting the capacity to contract.

Age of Majority

The age at which a person is entitled to manage their own affairs, typically 18 in most states.

Minority

The state of being below the age of majority.

Disaffirmance

A refusal to be bound by a previous legal commitment; the primary protection for those who lack capacity.

Necessaries

Things needed to maintain life or lifestyle, such as food, clothing, and shelter.

Ratification

Action by the party indicating intent to be bound by the contract

Emancipation

The severing of the child-parent relationship.

Scope of Authority

or within the range of contractual acts of the organization has authorized him or her to be responsible for.

Parties who lack capacity

• Minors

• The intoxicated

• The mentally impaired

The 2 types of emancipation

• formal emancipation- court decrees

• informal emancipation- based on the conduct on minor and the parent