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What are the Capacity to Enter into Contracts

What are the Capacity to Enter into Contracts

A person is assumed to have the capacity to enter into a contract. An intoxicated person, minor, or mentally incapable person has two options available to them after entering into a contract which affects the validity of the contract into which they have entered. The first option they have is to disaffirm a contract. Disaffirming a contract reveals a desire by an individual to no longer be bound by the contract. The disaffirmation can be verbal or active.
The other action that can affect the validity of a contract is ratification. Ratification reveals a willingness to be bound by the terms of the contract. As with disaffirmation, ratification can be verbal or active. If a person continues to use an item after they would otherwise be released from the contract, they have ratified the contract by action.
Ratification takes precedence over disaffirmation. If a person attempts to disaffirm a contract from which they have already received substantial benefit, the courts will not allow them to disaffirm the contract. The fact that the individual has benefitted from the contract is considered proof of acceptance to being bound by the contract.
It is impossible for anyone to disaffirm a contract they entered into in order to obtain essential services. Contractual obligations for necessary services cannot be avoided under any circumstance.

The Truth Behind Fraudulent Misrepresentation

The Truth Behind Fraudulent Misrepresentation

Fraudulent misrepresentation may be claimed by a party attempting to have a contract declared void if three different criteria are met. The first is that there is an occurrence intended to create justifiable reliance on a fraudulent misrepresentation. 
The party seeking to have a contract invalidated must show that they entered into the contract due to a justifiable reliance on the other party’s fraudulent misrepresentation. Justifiable reliance only becomes an issue if the claim is not readily apparent to be false. Failure to investigate a claim may be used to support a claim of justifiable reliance. The material misrepresentation must be made about an area that the injured party had no way of proving and thus was forced to rely on the other party’s statement.

All You Need to Know About Duress

All You Need to Know About Duress

As a legal concept, duress has a long tradition. Duress is related to the concept of undue influence. Duress exists when there is a threat of bodily harm, and the threat is immediate and cannot be avoided. Duress also exists in criminal law proceedings. In order for duress to exists in a contract law court proceeding there must be a wrongful or illegal threatened act. 
A contract also cannot normally be made voidable because one of the parties is suffering from economic duress. Claims of duress are filed by parties to a contract seeking to prove that their assent to a contract was not genuine, and thus did not fulfill the essential requirements needed to form a contract.
A contract cannot be invalidated by a party to that contract who claims duress because the other party threatened to sue them for a larger amount, because the filing of a law suit is a legally permitted action. A claim of duress is distinct from instances where the consideration offered by one of the parties is the forbearance of an action. 
Duress can be invoked if the party claiming they were acting under duress was in fear for their safety. An example of duress would be if a person is told to sign a contract or their family or they themselves would be harmed. This qualifies as duress because the consideration of forbearance is to forbear from doing an illegal act. If it is a wrongful or illegal threatened act then it constitutes an instance of duress.
A claim of economic duress is not usually permitted. Individuals are usually only able to successfully invoke a claim of economic duress if the other party in the contract is the immediate cause of the economic duress. Sometimes the courts permit a claim of economic duress to be filed in contracts which involve one party claims they are suffering from economic difficulties which are not caused by the other party in the contract, although such claims of economic duress are not usually accepted. 
Economic duress does not exist simply if exorbitant prices are charged for goods or a service. However, if the high prices are charged by the same party that created the need for the good or service then a claim of economic duress may be permitted by the courts.
If the individual claiming the contract was formed under duress is able to prove their claim, then the courts may declare the contract voidable. 

What You Need to Know About Withdrawing Acceptance

An offer and acceptance is the analysis of a traditional approach in contract law that is used to determine whether an agreement is valid between two parties. The term “agreement” consists of an offer by a party or individual (known as the “offeror”) to another entity known as the “offeree.”

The two sides enter negotiations based on the contract and its explicit stipulations. When the two sides agree on the intricacies associated with the agreement, a contract becomes realized.

When an offeree accepts the stipulations of an agreement or a contract, they are held responsible for fulfilling the intended roles of their agreement. If the offeree withdraws acceptance, depending on the form of the agreement, they will be held liable to fulfill the underlying terms of the agreement. There are instances where the offeree will be able to terminate the agreement, but a violation or a reneged stipulation must be present in the agreement.

Understanding Intent to Deceive

Understanding Intent to Deceive

In order for an allegation of fraudulent misrepresentation to be sustained there must be an intent to deceive on behalf of the accused party. The element of intent also requires that the deceiver must know that the information they are spreading is false or that the withholding of the information would constitute a fraudulent action.
The technical term for this intent to do wrong is known as scienter. Scienter is related etymologically to the word science. Both words refer to the possession of knowledge.
Laws concerned with fraud in contracts may find that scienter exists if one of the parties to the contract knows that one of the material facts that affect the contract in question is not true as they are stated in the contract.
Scienter is also determined by laws governing contracts to exist if one of the parties to the contract makes statements without any regard to whether the statements they utter are true or false. Laws regard this willful ignorance of the validity of the individual’s statements to rise to the level of fraudulent representation.
Scienter may also be found to exist if the party accused has claimed that their statements are based on personal knowledge or research when this knowledge or research has no actual basis in reality.

Simple Overview of Exculpatory Clause

Simple Overview of Exculpatory Clause

Contracts that are adjudicated to be contrary to public policy may result in portions of the contract being declared unenforceable.

Exculpatory Clause
An exculpatory clause is a provision of a contract that releases one party of the contract from all liability no matter who is at fault. Exculpatory clauses are normally permitted to remain in effect if the contracted party is engaged in an enterprise that is not considered essential to the public good, such as the operation of a recreational facility. However, with a clause that releases a company from liability which functions in a business that is considered essential to the public good, the courts w

Discover the Exceptions to General Rule Here

Discover the Exceptions to General Rule Here

During the contract drafting process every attention must be paid to ensuring that an illegal contract is not created. As a result, individuals responsible for contract drafting employ several safeguards to attempt to decrease the probability that they create an illegal contract.
Some of these preventative methods include using boilerplate language, which are terms used in a majority of contract drafting negotiations, as well as employing lawyers or people with a legal background in the contract drafting. However, even when these safeguards are employed, illegal contracts can still result.
Even if illegality is found to exist in a contract, it may still be enforceable in pari delicto, then a legal contract will not be ruled to exist.
If the violation of the law in question is not of a serious nature, then the illegal contract may be enforced as if it were a legal contract. If the compensation that would have to be provided in the event the contract was declared illegal would be out of proportion to the infraction of the concerned law, then the contract may be enforced as if it were a legal contract. The agreement may also be treated as a legal contract if the court determines that there would be an unjust enrichment to one of the parties in the event that the contract drafting was set aside.
If a contract is ruled to be illegal after actions have been done by one of the parties which cost money, the idea of quantum meruit may come into play. Under quantum meruit, which means “as much as deserved,” an individual may be able to recoup expenses in proportion to their outlay of money for services performed in an illegal contract if they performed the actions under the belief they were executing a legal contract.
Unlike in a legal contract, quantum meruit does not entitle the individual invoking it to hold the other person liable for the terms of the contract. This legal concept only allows the individual to recoup their losses.
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