4-Capacity

[|Lesson 1-LegalCapacityContract.ppt] • contractual capacity - the ability to understand that a contract is being made and its general meaning • age of majority - the age at which a person can be legally bound to contracts • minor - a person who has not reached the age of majority, which is usually 18 • disaffirmance - ending a contract when both parties give back the consideration • necessaries - things needed to maintain life and lifestyle • ratification - acting toward a contract as though one intends to be bound by it • emancipation - the severing of the child-parent relationship • mental incapacity - not having the ability to understand the consequences of contractual acts • intoxication - mental impairment caused by voluntary use of alcohol, drugs, or inhalants • scope of authority - within the range of acts an organization has authorized a party to do ||
 * **Important Terms for this Lesson:**

Summary of Concepts

What three classifications of individuals lack contractual capacity? **A:** The three classifications are minors, the mentally incapacitated, and the intoxicated. **Q:** What are two ways that capacity to contract on behalf of an organization can be created? **A:** Capacity to contract on behalf of the organization can come from a delegation of authority or from apparent authority created or allowed by the business. **Q:** Give two examples of informal emancipation of a minor. **A:** Two examples: (1) The parent and minor agree that the parent will cease support. (2) The minor marries. (3) The minor moves out of the family home. (4) The minor becomes a member of the armed forces. (5) The minor gives birth. (6) The minor undertakes full-time employment. || **Q:** What is intoxication? **A:** Intoxication can arise from using alcohol in forms such as beer or vodka, from using drugs such as marijuana or crack cocaine, or inhaling products such as glue or aerosols. ||
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