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    an agreement by or with a party not competent to contract is

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    Parties are not competent to contract if any one of them is .

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    Question

    Parties are not competent to contract if any one of them is __________.

    A

    a minor

    B

    insane

    C

    declared insolvent

    D

    All the above

    Medium Open in App

    Updated on : 2022-09-05

    Solution Verified by Toppr

    Correct option is D)

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    स्रोत : www.toppr.com

    CONTRACTS: BASIC PRINCIPLES

    CONTRACTS: BASIC PRINCIPLES� 430x

    ������ Contract: An agreement between or more to perform or to refrain from some act now or in the . A legally enforceable agreement.� [4301]����� Requisites for Contract Formation (Elements) 4305����� Agreement: One party must offer to enter into an agreement, and the other party must accept the terms of the offer����� Consideration: Something of value received or promised, to convince a party to agree to the deal;����� Contractual Capacity/ competent parties: Both parties must be competent to enter into the agreement;����� Legality: The contract�s purpose must be to accomplish some goal that is legal and not against public policy;����� Genuineness of Assent (Arguably part of agreement): The apparent consent of both parties must be genuine; and����� Form: The agreement must be in whatever form (e.g., written, under seal, etc.) the law requires.UNILATERAL AND BILATERAL CONTRACTS [4302]���� Every contract involves at least parties -- the offeror/ promisor, who makes the to perform, and the offeree/promisee, to . [4303]����� Unilateral Contract: A unilateral contract arises when an offer can be accepted only by the offeree�s performance (e.g., X offers Y $15 to mow X�s yard). 4302.08����� Bilateral Contract: A bilateral contract arises when a promise is given in exchange for a promise in return (e.g., X promises to deliver a car to Y, and Y promises to pay X an agreed price). 4302.09����� Express Contract: A contract in which the terms of the agreement are fully and explicitly stated orally or in writing.[4302.01]����� Implied-in-Fact Contract: A contract formed in whole or in part by the conduct (as opposed to the words) of the parties. In order to establish an implied-in-fact contract, [4302.02](1)� the plaintiff to the defendant,

    (2)�� the plaintiff must have and

    (3)�� the defendant must have so.

    ����� Quasi or Implied-in-Law Contract: A fictional contract imposed on parties by a court in the interests of fairness and justice, typically to prevent the unjust enrichment of one party at the expense of the other.[4302.03]FORMAL AND INFORMAL CONTRACTS [4302.04/5]������� Formal Contract: A contract that requires a special form or method of formation (creation) in order to be enforceable.����� Contract Under Seal: A formalized writing with a special seal attached.����� Recognizance: An acknowledgment in court by a person that he or she will perform some specified obligation or pay a certain sum if he or she fails to perform (e.g., personal recognizance bond).����� Negotiable Instrument: A check, note, draft, or certificate of deposit -- each of which requires certain formalities (to be discussed later).����� Letter of Credit: An agreement to pay that is contingent upon the receipt of documents (e.g., invoices and bills of lading) evidencing receipt of and title to goods shipped.����� Informal Contract: A contract that does not require a specified form or method of formation in order to be valid.����� The of contracts are informal (without a seal).

    EXECUTION AND VALIDITY OF CONTRACTS

    ������� Executed Contract [4302.11]: A contract that has been completely performed by both (or all) parties. By contrast,����� An executory contract [4302.10]is a contract that has not yet been fully performed by one or more parties.����� Valid Contract [4302.13]: A contract satisfying all of the requisites discussed earlier -- agreement, consideration, capacity, legal purpose, assent, and form. By contrast,����� A void contract [4302.14]is a contract having no legal force or binding effect (e.g., a contract entered into for an illegal purpose);

    ����� A voidable contract [4302.15] is an otherwise valid contract that may be legally avoided, cancelled, or annulled at the option of one of the parties (e.g., a contract entered into under duress or under false pretenses); and,

    ����� An unenforceable contract is an otherwise valid contract rendered unenforceable by some statute or law (e.g., an oral contract that, due to the passage of time, must be in writing to be enforceable).

    CONTRACT INTERPRETATION

    ������� The key to contract interpretation is to give of the parties as expressed in their agreement.����� Intent is generally to be ascertained objectively -- by looking

    at

    (1)�� the words used by the parties in the agreement,

    (2)�� the actions of the parties pursuant to the agreement, and

    (3)�� the circumstances surrounding the agreement

    as they would be interpreted by a reasonable person -- rather than the parties� intentions (usually expressed after the fact).

    ����� The Plain Meaning Rule: When a contract is clear and unequivocal, a court will enforce it according to its terms, set forth on the face of the instrument, and there is no need for the court either to consider extrinsic evidence or to interpret the language of the contract.

    स्रोत : www.shsu.edu

    Competent Parties to a Contract: What You Need to Know

    Competent parties to a contract have the ability to comprehend a contract is being created and understand the nature of the contract.

    Competent Parties to a Contract: What You Need to Know

    Competent parties to a contract have the ability to comprehend a contract is being created and understand the nature of the contract.3 min read

    1. Overview of Contractual Capacity

    2. Overview of Competent Parties

    3. Minors

    4. Persons Under the Influence of Alcohol or Drugs

    5. Mental Illness

    6. Competent Parties

    7. Legalese

    Competent parties to a contract have the ability to comprehend a contract is being created and understand the nature of the contract.

    Overview of Contractual Capacity

    It is a presumption of the law that everyone has the capacity to contract. If a party does lack the capacity, the contract is usually voided and the party without capacity will not need to comply with their obligations to the contract. Both parties must have contractual capacity to create a binding contract.

    Just because a person does not fully understand the contract's meaning and its terms will not automatically mean the person is lacking in contractual capacity.

    The common law rule stipulates that persons under the age of 21 years are considered a minor and therefore are deemed by law to lack contractual capacity. Many states have changed this rule and reduced the age limit from 21 to 18 years. Other states have changed the age of majority to 19 years.

    Overview of Competent Parties

    A competent person is someone who is of legal age. The person must have the mental capacity to enter into a contract knowingly. They must also understand it is enforceable by law. Some parties are not contractually competent. These include:

    Minors

    Persons influence by alcohol

    Persons influenced by drugs

    Mentally ill persons who are not declared insane

    Those with a limited capacity to contract

    A person who is incompetent and has a limited capacity to contract is allowed to back out of a contract. This is a legal right called disaffirmance.

    Others who are completely incompetent have no legal capacity to contract. This includes persons declared insane by a court due to mental illness.

    Minors

    If a competent party chooses to deal with incompetent parties, such as minors, they do so at their own risk. This is because minors may disaffirm or avoid ordinary contracts, usually, any time before they reach the age of majority and a reasonable time after reaching the age of contractual competence. Adults do not have the avenue to disaffirm and are bound by the agreements they've made.

    Minors in many states cannot disaffirm an agreement for the following:

    The sale of real estate

    A loan

    Agreements involving life insurance

    Selling stock

    A contract involving the minor's business

    If the minor lies about their age

    Persons Under the Influence of Alcohol or Drugs

    There are some situations where agreements made by a person under the influence of drugs or alcohol are voidable. Once the person is sober, the agreement made while under the influence may be disaffirmed. This may happen only if the other party was responsible for the person to be under the influence or they knew the person was incapacitated and unable to understand the terms and consequences of the contract. There is a reasonable timeframe for the sober person to disaffirm or they will lose the right to do so.

    Mental Illness

    An agreement made with a person declared legally insane by a court is considered void. Agreements made by persons with mental illness, but a court has not declared them legally insane, are voidable only if the disability can be proven.

    When this person understands what they did, the contract may be disaffirmed or ratified, provided the consideration they received under the contract is returned to the other party. All persons, whether they've been declared legally insane or not, are liable for the reasonable value of necessaries/considerations furnished to them.

    Competent Parties

    Each party must be competent to contract legally binding agreements. The parties must exist and be identifiable and have the authority to contract.

    In situations where there is a contracting person appointed to handle contractual dealings, proof should be attained validating that the person signing has the authority to do so. Examples of when this may occur would be someone appointed as a personal representative of an estate, a corporate assignee, someone with a power of attorney, or a court-appointed trustee or receiver.

    Legalese

    In practice, when working with an agreement, the assumption is that the person is competent unless you know otherwise.

    Material Fact - this is information known to you that affects a transaction.

    Concealment - all material facts must be disclosed. If they are not, this is concealment.

    Guardian - an incompetent person may have a guardian or conservator assigned by the court.

    If you need help with competent parties to a contract, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

    स्रोत : www.upcounsel.com

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