Business Law with UCC
Applications,13e
Capacity and Legality:
The Final Elements
Chapter 10
McGrawHill/Irwin
Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved.
Learning Objectives
1. Identify the age of minority and the age of
majority.
2. Explain the legal status of a contract made by a
minor.
3. Differentiate between ratification and
disaffirmance.
4. Identify the effects of mental impairment on a
contract.
5. Discuss the contractual capacity of a drugged or
intoxicated person.
102
Learning Objectives
6. Explain the legality of agreements to commit
torts and crimes.
7. Identify those agreements made illegal under
statutory law.
8. Enumerate those agreements contrary to public
policy.
9. Explain what happens under the doctrine of in
pari delicto.
10.Explain the effects of illegality.
103
Capacity and Legality:
The Final Elements
• The Final Elements
– The Nature of Capacity and Minority
– Contractual Capacity of Minors
– Ratification and Disaffirmance
104
Capacity and Legality:
The Final Elements
• The Nature of Capacity and Minority
– Definition of Minority
– Emancipation and Abandonment
– Misrepresentation of Age
105
Capacity and Legality:
The Final Elements
• Contractual Capacity of Minors
– Contracts for Necessaries
– Other Contracts not Voidable
– Shield or Sword Doctrine
– Voidable Contracts and Innocent Third Parties
– Ratification and Disaffirmance
106
Capacity and Legality:
The Final Elements
• Other Capacity Problems
– Persons Mentally Impairment
– Persons Drugged or Intoxicated
107
Capacity and Legality:
The Final Elements
• Agreements to Engage in Illegal
Activities
– Agreements To Commit Torts and Crimes
– Agreements Illegal under Statutory Law
– Agreements Contrary to Public Policy
108
Capacity and Legality:
The Final Elements
• Agreements Illegal under Statutory Law
– Usurious Agreements
– Wagering Agreements
– Unlicensed Agreements
– Unconscionable Agreements
– Sunday Agreements
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Capacity and Legality:
The Final Elements
• Agreements Contrary to Public Policy
– Agreements to Obstruct Justice
– Agreements Interfering with Public Service
– Agreements to Defraud Creditors
– Agreements to Escape Liability
– Sale of Business
– Restrictive Employment Covenants
– Nondisclosure Agreements
1010
Capacity and Legality:
The Final Elements
• Consequences of Illegality
– In Pari Delicto Contracts
– Partial Illegality in and Agreement
1011