Capacity and Legality

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Business Law 110
Capacity and Legality

Question and Problems

1. In the United States the idea of an “age of majority” for granted; the only question is whether it should be 18, 19, or 21. Though in Great Britain there is no age at which a young person acquires the legal capacity to enter into a contract. British courts will not enforce contracts with immature minors. However, they make the decision of whether a person is too immature to enter into contract on a case-by-case basis. If the courts consider a person under 18 to be able to look out for his or her own interests, the contract will be enforced. If not it will be void. A key factor is often the fairness of the agreement.

2. Obligations of a minor who chooses to disaffirm a contract is that it protects the minor from competent parties who might otherwise take advantage of him or her. Any contract entered by a minor is voidable by the minor until she or he reaches the age of majority or a reasonable time thereafter. It is only the minor who has the right disaffirm, never the adult with whom the minor entered into the agreement.

3. Exceptions to the minor’s rights to disaffirm the contract. As discussed before the minors right to disaffirm is to protect them from competent parties. But primarily for public policy reasons, in most states, courts or state legislatures have determined that the minor should not have the right to disaffirm contracts for life insurance, health insurance, psychological counseling, the performance of these duties related to stock and bond transfers and bank accounts, education load contracts, child support contracts, marriage contracts and enlistment in the armed services Most of these exceptions apply in most, but not all states. Another issue that may arise is states disagree in what would happen id a minor misrepresents his or her age. While the majority rule is that a minors misrepresentation of age does not affect the minors tight to disaffirm the contract, some...
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