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Important Facts You Need to Know About MentalIncompetency

Important Facts You Need to Know About MentalIncompetency

Being mentally incompetent deals with the inability to perform a duty or understand it. Illiteracy is not a type of mental incompetency since you are not limited mentally. Rather you lack the knowledge to be labeled literate. Mental incompetency may be related to various disorders and illnesses. An example of a disorder which may be deemed excusable by contract law could be one in which an individual suffers extreme ADD or has totally lost touch with their environment.
According to contract law, if the nature, purpose, and consequences are not fully understood due to the lack of mental capacity, the contract is voidable on the discretion of the mentally incompetent individual. Contract laws tend to define mental incompetency as lacking the capacity needed to undergo a legal process.
By a court of law, one is deemed mentally incompetent when diagnosed as mentally ill, mentally retarded, senile, or suffering from some other disability that prevents them from managing their own affairs. A guardian is appointed in order to aid the mentally incompetent in carryout out their personal and legal affairs.
There are three steps which lead to the determination of labeling an individual as mentally incompetent and excusing them from their duties to contract laws. The first is the motion for a competency hearing. The second is a psychiatric or psychological evaluation. Third, there is a competency hearing.
Most motions need to be filed prior to the sentencing. In this case, it would mirror that which occurs with the motion for a competency hearing. These hearings tend be granted “if there is a reasonable cause to believe that the defendant may be suffering from a mental disease or defect rendering him mentally incompetent” (18 U.S.C.A. § 4241 (a)).
Once that is complete, the court appoints a psychiatrist or a psychologist to evaluate the individual who has been subjected to mental incompetency. The appointed individual implements various psychological tests and investigations in order to deem a person competent or incompetent.
Following these two steps, the competency hearing determines the mental capacity of the individual to understand their obligations within a contract. Once all is said and done, either the contract is enforced or the individual is excused from his obligations, and is admitted into a hospital for a period of four months to evaluate whether or not the individual may be able to reacquire his or her competency.
Contract law also deems individuals who, when entering a contract while intoxicated, as being able to void a contract due to the lack of awareness regarding the nature, purpose, and consequences of the contract. If legally incompetent, a marriage contract may also be annulled based upon insanity, legal age, mental incompetence, and a preexisting marriage. 
Regarding contract law, one of the most delicate contracts to validate are wills. When a will is being drafted and goes through the court process of probate, deciphering between the intent of the will and what appears on it may involve complications. The complications may arise from individuals who persuaded the testator to write something within the will or a beneficiary party acting upon behalf of the testator himself. This is why the mental competency of the testator needs to be determined when the will is being enforced.

In Depth Overview of Principal

In Depth Overview of Principal

When an individual receives the authority to act on behalf of another, they are known as principal agents. A principal gives the authority, by way of investment or contract, to the principal agent. A contract is arranged in order to set up the guidelines on how the agent acts on behalf of the principal.

An example of a principal-agent relationship is how the shareholders of a corporation are investing within the entity, while the entity performs its duties of raising profits and becoming more productive. The principal in this situation are the shareholders, and the corporation acts as the principal agent. The shareholders may cancel the contract at any time, but while they are the principals, they elect officials within the corporation through a voting system which they have been given the right to do. 

An issue may occur based on the conflict of interest between the two parties. An example being, if the corporation needs to take one route for its benefit, and at the same time, the stock of the corporation may go down, which negatively affects the interests of the shareholders.

There is no set goal on which the principal may be satisfied since they are hiring an agent in order to do what they specialize in. The agent in this case is to perform to his or her maximum ability in order to satisfy the principal. The only way the principal may feel dissatisfaction is if their interest within the agent depreciates.

A principal agent has a fiduciary duty towards the principal. The duties of an agent include the following: (1) To perform the tasks specified within the terms of the contract to the best of their ability, while the principal agents do not have the authority to perform acts on behalf of the principal that are not stated within the agreement; (2) An obligation to relieve his obligations with due diligence and care; (3) The duty of avoiding any conflict of interest, not only between the two parties specified in the contract, but also any conflict which they may incur even though it is not stated within the agreement.

A principal agent is not to perform any additional duties which may conflict with a prior obligation to which he or she has committed. The main issue within the principal agent relationship directly involves the lack of full disclosure. The principal has the duty to update the agent on any information which relates to the transaction or the tasks the agent has on hand. The agent must do the same, and the agent has an extra obligation of not increasing his interest without increasing the principal’s. If an agent is acting on behalf of a principal, the agent must make sure the increase in interest between the two is relative.

Understand the Requirements of a Contract

Understand the Requirements of a Contract

In order to form a contract, five distinct aspects must be present. The first is that there must be consideration. The offer and acceptance of contracts is often referred to as an agreement.
Consideration in a contract does not apply if the contracted act is something legal prohibited. For instance, a contract cannot be entered into if the consideration of one of the parties is to kill another person, because the killing of another person is not normally a legal right.  
Contracts can only be enforced legally if the parties involved in them are believed to have wanted the courts to become involved in them at the time the contract was created. Two parties who claim they are entering a “gentleman’s agreement” are usually not considered to have entered into a contract.    
A contract cannot be considered to be valid unless both parties to the contract have the legal capacity to enter into the contract. Legal capacity has several elements. The first is that both parties must be of sufficient age to be considered above the age of majority. While a minor may become a party to a contract, they can disaffirm any contracts they enter into at any time. In the event a minor party to a contract disaffirms the contract, the minor must forfeit any goods they received. 
Recently, minors voiding contracts have been held responsible for returning the items covered in the contract in the same State they were granted, as are adults. Of course, the minor is only responsible for returning the consideration if it is currently in their possession.
The final requirement to creating a contract is that there must be a formality to inform both parties that the contract is in effect. The formality, however, is not standardized. It may involve affixing signatures to a written contract or shaking hands to formalize a verbal contract.

All You Need to Know About Common Law Governance of Contracts

All You Need to Know About Common Law Governance of Contracts

Contract law is based in three different areas. The first, and rarer, basis for contract law is a specific statute governing a contract. The second area is the Uniform Commercial Code. The more pervasive foundation of contract law is common law. Common law is not written down or codified in any particular place. Common law is instead the tradition of law in a particular jurisdiction.
Common law as it reflects on contract law is influenced by the findings of British common law in effect at the time of the American Revolution in 1775. The common law decisions that have been handed down by individual states since British common law ceased to be the governing principle of the location and any relevant finding by a Federal judge.
Common law is a general term for any legal precedent that is taken from a judge’s individual ruling. The main statute which provides the foundation of English common law is based on the interpretation of the 1677 Statute of Frauds. It has been incorporated into the common law heritage of all fifty states in the United States at some point.
The main concern in a common law system regarding contracts is if one party is allowed to sue another person. Contract law in a common law system calls this idea the concept of privity of contract. In contract law, privity answers the question of whether an individual party has the legal standing to sue another party, as well as what the responsibility is of the party being sued. Privity in contract law says that rights cannot be extended to an individual who has not entered into the contract in question, and that a third party not involved in the contract has no liability for the terms of the contract.
Privity is a complicated but essential aspect in contract law in common law systems. The 1968 English case of Beswick v. Beswick examines the complications when two parties enter into a contract to provide for the welfare of a third party. The elderly Mr. Beswick and his nephew created a contract in which Mr. Beswick sold his company to his nephew. One of the terms of the contract was that Mr. Beswick’s would-be widow, Mrs. Beswick, be provided with stipend after Mr. Beswick’s death.
The nephew agreed to the contract, but after the death of his uncle declined to provide the stipend. The nephew claimed he was under no obligation to provide the stipend because his aunt had not been involved in the original contract. The court in this case upheld the nephew’s contention. However, because Mrs. Beswick was the administrix of his estate, and thus a party to the contract because the estate maintained an interest in the contract he was still compelled to uphold the terms of the contract.
Outside of circumstances such as that in Beswick v. Beswick where the third party assumes the interests in one of the original parties, the only other time a third party can become directly involved in a contract under the concept of privity inherent in a common law system is when one of the original parties to the contract has been acting on behalf of the third party from the beginning.
For instance, John is working for Joe. Joe and Jack enter into a contract. John would then be able to compel Jack to fulfill the contract because the duties in a contract can be transferred. If Joe were not working for John, John would be unable to force Jack to complete the contract.

Uncover the Functions of Contract Law

Uncover the Functions of Contract Law

Contract law has been construed historically that if ambiguous language is employed, then the contract will be interpreted in such a way as to give favor to the party that signed the contract, not the party that wrote the contract. Contracts law is derived from a common law heritage. 
Another major function of a contract is to document what each party to a contract is obligated to do for the other. Contract laws also serve to assign consequences in the event either party is unable to perform the duties taken up under the terms laid out in the original contract.
Contracts law is also meant to uphold the basic processes by which the economy functions in the United States and in all countries throughout the world, though not every country has a common law basis for understanding contract law.
Contract law in other systems may have a heritage derived from civil law, Islamic law, socialist law, and/or from tribal law. Depending on each country’s specific views of contracts, law systems in the country may assign more protection to the consumer or may afford more protection to the corporation.

All You Need to Know About Partnerships

All You Need to Know About Partnerships

There are two forms of partnerships: a general and a limited type. Both of these are subject to special authorizations when undergoing a contractual process. In a general partnership, in order to complete a general contract, all partners must consent. The contractual processes may be handled and performed by a separate entity, if hired to do so, on their behalf.
A review of partnership agreements is a necessity in order to ensure that each agreement was valid if all the members’ consents were not given. A partnership is formed with two or more people who are looking to earn a profit. Within the partnership, there is a superior partner, who has more liability than the other partners due to their co-signing or amount of investment put forth.  
The Uniform Partnership Act establishes rules and standards for partnerships, A partnership is not a taxpaying entity; it is a tax reporting entity, forming a pass-through taxation which is a key perk. There is a joint liability amongst all the partners for their partnership’s obligations. 
In a limited partnership, there are also two types of partners: limited and general. The limited partners have just as much authority in most cases, but they lack the authority to override decisions and commit agreements on behalf of the partnership without the consent of the general partners. The limited partners also have limited liability, where they are not as liable as general partners. Thus, the main decision-making is in the hands of the general partners.
General contracts need to be approved and agreed upon by all general partners. Approval is also needed from limited partners in a majority of the agreements, unless they are not present. General contract review is necessary at the end of each quarter in order to ensure that each agreement was done not only legally, but also with the approval of the general partners.
If a general contract is not approved by a general partner due to their absence, those general contracts are also overlooked at the end of the quarter in order to make sure that the general contracts were agreed upon by the other general partners within the partnership.
General partners owe more liability to the partnership either because they were appointed as a general partner, they had put up more of an investment, they have more capital in which the other partners stay protected, or because they are more experienced and the partnership revolves around their expertise.
General contracts are to be signed by majority of the partners, all of them if possible. If there is a debate to whether a general contract should be signed, it goes into a voting system in which the limited partners’ votes may count as 1 vote, while the general partners may count as 1 1/2 or 2 votes each. This method is designed to maintain an equilibrium within the partnership and to ensure that the partners with more expertise have more of a leverage when it comes to voting on general contracts.

Al You Need to Know About Contract Law

Al You Need to Know About Contract Law

Contract law forms the basis of nearly all commercial interactions in modern society. Although many people do not realize it, they enter into several contracts each day.
Contracts include the obvious examples, such as leases, rental agreements, employment contracts, and real estate sales, but also include the purchase of a soda from the neighborhood convenience store. It would be very difficult to imagine a modern society that was not dominated by contracts in the way that the United States and much of the world is currently.
Background
Contract law takes its basis from the Latin phrase pacta sunt servanda, which means “agreements are to be kept.” The understanding of contract law that is held in the United States is based on the British common law system and has been modified by the Uniform Commercial Code.
 
Contract law places obligations on all parties that enter into contracts which are mutually binding. In most circumstances, these contracts cannot be broken without the breaking party being required to provide compensation to the other party. To learn more about the history of contract law, please read this link.
Common Law Governance of Contracts
Contract law is based on a common law heritage inherited by America from Great Britain. Under the common law system, the laws governing contracts were not codified as they are today. Instead, the governance of contracts was based on previous rulings by the justices. Contract law is based in both the common law and equity court systems of England.
 
As a result, American contract law is concerned both with ensuring that contracts are enforced when the fairest course of action is to enforce the contract, but when it would place an unreasonable burden on one of the parties, the courts often abridge contracts. The preference of non-interference in contractual relationships is found in the Contract Clause of the Constitution.
Uniform Commercial Code (UCC)
The UCC, or Uniform Commercial Code, is a national attempt to streamline the laws governing commerce across the United States. It consists of 11 Articles. Ten of these Articles have been adopted in every State. Louisiana is the only State that has not adopted every Article.
Although the UCC is not the specific law in any jurisdiction, it does provide the basis for each State’s commercial laws. Each State adjusts the organization of the Code to adhere to its particular tradition, but the essential elements remain the same from State to State. For more information on the UCC, please click the link.
Functions of Contract Law
Contract law exists to record the obligations each party to a contract has to the other party. Contracts also are meant to protect the rights of both parties to the contract. In addition to laying out the responsibilities of the contracted parties, contract laws also assign each party with rights. Contract laws also lay out penalties in the event a contractual obligation is not upheld. To learn more about the fundamentals of contract law, please click the link.
Objective Theory of Contracts
The objective theory of contracts states that contracts will only be enforceable if a reasonable observer watching contractual negotiations would believe the terms being laid out are fair.
This is an essential element of contract law because it serves a court examining a contract with a reasonable baseline against which to compare the terms of a contract. It allows an advertisement of ridiculous terms to not be considered a serious invitation to treat. For a more thorough examination of the theory please follow the link.
Requirements of a Contract
There are five common elements that must be present to form a legally enforceable contract. These elements are agreement (which constitutes offer and acceptance), consideration, the intention to be bound by the contract, the legal capacity to enter into a contract, and the formalization of the contract. It is also essential that the contract be for a legal purpose. For a more thorough examination of these aspects, click the link.
Contract Types
There are six different types of contract. These contract types constitute three different categories. There are bilateral and unilateral contracts. Formal and informal contracts form the next classification. The final category of contracts is express contracts and implied-in-fact contracts. Each type of contract can best be explained by following the comparisons found here.
Enforcing Contracts
When attempting to enforce a contract, the courts divide contracts into two broad categories of contracts. Valid contracts include enforceable contracts, voidable contracts, and unenforceable contracts. If a contract is not valid, it is considered a void contract.
A quasi-contract may be formed either through a statute that imposes contractual obligations between two parties or affords protections to circumstances that the Government finds needs the protection. For a more thorough examination of the ways in which contracts are enforced, follow the link.
Interpreting Contracts
When charged with interpreting contracts, the courts will usually attempt to interpret them in a manner that most clearly adheres to the original intentions of the parties at the time the contracts were formed. If the intentions of the contracting parties cannot be determined, the courts will attempt to base their interpretation on the fairest interpretation of the terms. 
In the event that evidence suggests that the party which drafted the terms of the contract left the wording intentionally vague, the courts will interpret the contract in a way most beneficial to the party which did not draft the contract. For an analysis of how the courts typically imbue meaning to the contracts before them, follow the link.
The legality of a contract can be attacked from several fronts by a litigant. A litigant may argue that a contract should be invalidated because it is a contract contrary to statute. A litigant may also claim that a contract they have entered into should be declared void or voidable because it is contrary to public policy.
At any point when a contract is before the court, the court can declare that a contract is illegal because it has been formed in order to engage in the commission an illegal act. If only a specific clause causes the contract to be illegal, and the clause can be stricken without fundamentally changing the contract, then the courts may enforce an existing severable clause or create one if it does not already exist.
The legality of a contract may also be disputed if a litigant claims that their assent was not genuine. There are several reasons that the courts may hold this to be an acceptable reason to rescind a contracts standing as valid. To examine the legal challenges that may be filed against a contract, please see the link.

Understanding Agents

Understanding Agents

Principal

The law states that one who is a principal has a fiduciary duty owed to him by an agent. The agent receives this duty by being appointed by the principal. The purpose behind the appointment is for the agent to carry out special tasks on hand in which they are specialized. 
In return for a fee, the agent must perform his duties to the best of his ability in order to satisfy not only his principal, but also the guidelines of the law. The law that describes the ethical standards and duties of an agent towards his principal are located within the State laws as well as previous court opinions. 

Power of Attorney
Power of Attorney is granted through the consent of the principal given to the agent. The agent has the ability to be able to perform various duties which do not conflict with the interests of the principal since there is a fiduciary obligation. The agent must abide specifically to the terms set forth in the contract. 

Contract Law Simplified Background

Contract Law Simplified Background

Contract pacta sunt servanda, which translates to “agreements are to be kept.” The essential contract law basis is that contracts cannot violate the rights of either party to the contract.
The main contract law basis is to ensure that the contracts that parties enter into are honored by both parties. Contract law defines any agreement between two parties in which one agrees to provide something to another party in exchange for goods, services, or financial compensation as a contract.
Contract law defines most contracts as being made orally. One of the less understood or appreciated contract law basics is the idea that a purchase in a store for anything, ranging from a pack of gum to a high definition television, represents an oral contract. Contract law only prevents parties from entering into contracts that are trifling, indeterminate, or illegal.
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