Textbook Notes (368,123)
Canada (161,661)
LAW 122 (618)
Chapter 10

Chapter 10 Notes

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Law and Business
LAW 122
Kernaghan Webb

Chapter 10: Contractual Defects INCAPACITY TO C ONTRACT A person cannot enter into a contract unless they have the legal power to give consent. To protect specific groups of ppl, the law has drawn a distinction bt those who have the capacity to contract and those who do not. o Capacity: is the legal power to give consent. Sometimes the question of capacity depends on a persons ability to understand the nature & consequences of their actions. We will consider 7 groups of persons who may have no capacity or only limited capacity to create a contract. Minors Associations Mentally disable Indian Band & persons Aboriginal ppl Intoxicated persons Public Authories Corporations Personal Incapability Minors The law distinguishes bt minors and those who have reached the ageof majority. o Age of Majority: is the age at which a person is held fully accountable in law. o Minors: are people who have not reached the age of majority. The law simply says that everyone under the age of majority lacks capacity. In some jurisdictions (i.e. Alberta, Saskatchewan, Ontario) the age of majority is 18 years. In other provinces (Newfoundland, New Brunswick, B.C.) the age of majority is 19. The laws approach shields minors from exploitation and the consequences of their own inexperience. o Voidable: a contract is voidable if a minor is entitled to avoid the legal obligations that are created. Only somecontracts w minors are voidable, not every contract with a minor is void at the onset. If a contract is voidable, the minor may elect to avoid contractual liability. If so, they are relieved of all future liabilities under the contract. If a minor wants to void a contract, they should do it asap. Finally, once a person reaches the age of majority, they must decide, within a reasonable time, whether they want to void a contract that created as a minor. Minors who elect to avoid a contract must give back any benefits that they received under them. There are some contracts that minors cannot avoid contracts for necessary goods & services like food, clothing, education, medical treatment, and legal advice, which are for their benefit. Minors cannot void contracts of employment that are to their benefit. Mental Incapability Regardless of age, a person may also lack capacity bc of a deficient intellect. We need to distinguish 2 situations: i. If a court has declared a person to lack mental capacity, their contracts are void & cannot be enforced at all. www.notesolution.com
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