blaw chap 11

capacity

The legal ability to enter into a binding contract. A party must understand the nature, purpose, and effect of the contract.

mental acuity

A person's cognitive ability to understand and make rational decisions about a contract.

minority

Individuals under 18 years old are generally considered to lack capacity to contract, with some exceptions (e.g., necessities).

incompetence

A legal status where an individual lacks the ability to contract due to mental impairment.

adjudicated incompetnece

A court decision declaring a person mentally incapable of managing their affairs.

guardian

A court-appointed person responsible for managing the affairs of someone deemed incompetent.

temporary incpacity

Situations where a person temporarily lacks capacity, such as intoxication or a medical condition like a coma.

permanent incapacity

Long-term or lifelong conditions that prevent a person from entering a contract (e.g., severe developmental disabilities).

genuine assent

The agreement must be made freely, knowingly, and without coercion, fraud, or mistake.

duress

When one party forces another into a contract through threats or coercion.

undue influence

When one party manipulates or pressures another into an agreement, often exploiting a relationship of trust.

fraud

Intentional deception to mislead another party into entering a contract.

misrepresentation

A false statement that induces someone to enter into a contract, even if made without intent to deceive.

mistake

– A misunderstanding by one or both parties that affects the contract's validity

equity

A branch of law that provides remedies when legal damages (monetary compensation) are insufficient or inapplicable.

equitable remedy

A non-monetary remedy based on fairness, often used when there is no contract, ensuring fair value is provided.

contractual capacity

The legal ability to enter into a binding contract; minors (under 18) typically lack full contractual capacity.

unjust enrichment

A legal principle preventing someone from unfairly benefiting at another's expense without proper compensation.

restitution

The return of benefits or property gained under an unenforceable contract, ensuring the other party is not unfairly disadvantaged.

minors equity rule

The principle that minors must pay the reasonable (fair) value for necessaries provided to them.

necessaries

Essential items such as food, shelter, medical care, and transportation, for which minors must pay a reasonable value.

reasonable value

The fair market value of goods or services, even if a contract sets a different price.

innocent minor

A minor who unknowingly enters a contract without misrepresenting their age; they may void the contract and are not required to make full restitution.

misrepresenting minor

A minor who lies about their age (e.g., using a fake ID);

ratification

The act of confirming or continuing a contract upon reaching the age of majority, either expressly or by conduct (e.g., continuing payments).

recission

An equitable remedy that cancels a contract and restores the parties to their pre-contractual positions.

deception

Misleading someone into an agreement through false statements

negligent misrepresentation

Providing incorrect information without due care.This occurs when a party fails to exercise reasonable care in obtaining or communicating information, leading to a false belief in the other party.

pressure

Coercion affecting a person’s ability to consent freely

material fact

A significant fact that impacts contract decisions.

puffing

A sales technique involving exaggerated opinions that are not legally considered fraudulent because they are subjective

reckless disregard

Making a statement without knowing whether it is true or false, showing a lack of concern for its accuracy.

tort of deceit

A legal claim arising from fraudulent misrepresentation, where someone intentionally misleads another person, causing harm.

judicially disfavored

A legal principle indicating that courts are reluctant to find fraud due to the high burden of proof required.

fiducaiary duty

A legal obligation of trust requiring one party (e.g., a lawyer) to disclose all material facts to another party.

latent defect

A hidden flaw in a product or property that is not immediately visible and must be disclosed if material.

patent defect

A flaw that is obvious and visible upon reasonable inspection; sellers are not always required to disclose these.

duty to disclose

Fiduciaries must disclose defects, but ordinary sellers may not have to.

economic duress

financial pressure rather than physical threats.

justifiable reliance

The deceived party reasonably believes and acts on the false statement.

intentional mistatement

Knowingly stating something false.