Textbook Notes (363,103)
Canada (158,195)
MGSC30H3 (57)
H Laurence (33)
Chapter 9

Chapter 9 Notes

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University of Toronto Scarborough
Management (MGS)
H Laurence

Chapter 9 Legal Capacity to Contract and the Requirement of Legality NotesThe Minor or Infant y not everyone is permitted to enter into contracts that would bind them at law y certain classes of promisors must be protected as a matter of public policy either for reasons of their inexperience and immaturity or because of their inability to appreciate the nature of their acts in making enforceable promises y the law attempts to balance the protection of the minor with the need to contract by making only those contracts for necessary items enforceable against a minor Enforceability and the Right of Repudiation y if the contract made by the minor has been fully performed and consequently fully executed then the minor may very well be bound by the agreement unless he or she can show that he or she had been taken advantage of by the merchant or can return all the goods purchased to the other party y the adult with full capacity to contract is bound in every case by the contract negotiated with an infant since the adult person has no obligation to do business with an infant unless the adult wishes to do so y any business firm or merchant that decides to enter into a contract with a minor assumes the risk in the case of a contract for a nonnecessary that the minor might repudiate the agreement Criteria for Necessary y the unusual aspect of the law relating to minors is the criteria used by the courts to determine what is a necessary for a minor y in many cases contracts of employment or apprenticeship are contracts considered to be beneficial to minors and are enforceable y although some educational ventures that involve minors may not be considered by the courts as being beneficial many are held enforceable even when the educational aspect is unusual The Effect of Repudiation y the general rule relating to contracts that have not been fully performed executory contracts for nonnecessary goods or services is that the minor or infant may repudiate the contract at any time at his or her option y this rule applies even when the terms of the contract are very fair to the infant y once the contract has been repudiated the minor is entitled to a return of any deposit paid to the adult contractor y any damage to the goods that is not a direct result of the minors deliberate act is not recoverable by the merchant the merchant may not deduce the wear and tear to the goods from the funds repayable to the infant y the reasoning of the courts in establishing this rule is that the merchant should not be permitted to recover under the law of torts what he or she cannot recover by the law of contract y however if the minor deliberately misrepresents the use intended for the goods and the goods are damaged then the merchant may be entitled to recover the loss by way of an action for tort Fraudulent Misrepresentation as to Age y protection extended to a
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