Business Law

Thread: Question 4- John’s Loan

Allison F

Question 4- John’s Loan

I think that John will be able to get out of the loan because John was not able to legally enter into a contract in the mental state that he was in. Fred should allow John to void the contract, even if Fred was unaware of John’s incapacity to enter into a contract for a loan. If John states that he would not enter into the loan contract in a sober state and Fred does not void that contract, it could be considered fraud.

Matthew M

RE: Question 4- John’s Loan

Capacity to give consent involves a general understanding of the nature of the contract. A person with a mental impairment, for example, may have the capacity to understand some contracts (like the example above), but not to understand other, more complicated contracts (buying a car).

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Thread: Discussion 9

Matthew M

Discussion 9

Why is it important that every contract contains capacity on behalf of all parties entering into it?  Why isn’t it good enough that at least just one party has capacity?  Let’s discuss!!

It’s VERY important that both parties have capacity when entering a contract because if someone in the contract does not have capacity like you do – you cannot come back on them for a broken contract.  For example, in the case of an adult making a contract with a teenager – the teen does not have capacity to understand the true meaning of the contract and it may be thrown out it court.
Jeffrey O

RE: Discussion 9

I agree Matthew, It is important that both parties have the capacity to enter a contract. If only one party has capacity to enter a contact they may take advantage of the other party. On the other hand a minor can enter contracts and then dissafirm them, leaving the other party holding the bill.

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Thread: Patrick

effrey O

Patrick

Patrick is liable for his purchases that he made. By leaving home to support himself Patrick became emancipated. When a minor becomes emancipated they loose the aability to dis affirm a contract.

Michelle M

RE: Patrick

I’m not sure if Patrick would be considered “emancipated”, by the reading? Emancipation can occur if he got married, entered the military or through the court system. Since the scenario stated that it was “against his parents wished”, I wouldn’t think he would be granted it through the courts. I don’t think he could be contractual liable from how I read it.

Joshua M

RE: Patrick

Michelle, I do think Patrick would be considered emancipated because normally minors who leave home to support themselves are considered emancipated. I do understand that his parents did not relinquish their legal right to exercise control over him, but, he did leave home to support himself. I also think that he would be contractually liable for his purchases because although he has the right to dissafirmance, his parents are only liable to pay for his necessaries, and not for other contracts made by the minor. This is a general rule. He would however fall under the category of dissafirmance within a reasonable time. His contract of emancipation that I believe was created by leaving home and supporting himself, can be dissafirmed even though he turned 18 according to dissafirmance within a reasonable time. It states on page 239 “A contract can ordinarily be dissafirmed at any time during minority or for a reasonable time after the minor reaches the age of majority.” Considering Patrick moved backed on the day of his 18th birthday, I think he dissafirmed his contract within the reasonable time but would still be liable for the contracts he made while living away from home.

 

 

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Thread: #3…Lucinda

Michelle M

#3…Lucinda

Since the scenario stated that Lucinda has “lucid” moments, I would have to assume she would be bound to the contract with the dealer. Unless her diagnoses of being paranoid schizophrenic was “adjudicated”. Being adjudicated by the courts to be mentally incompetent means, this person may not legally bind themselves to a contract. The scenario doesn’t state if she was “legally” diagnosed or just through her doctor?

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