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Contracts • Defenses to Enforcement and Formation
K#049
Legal Definition
Persons without legal capacity to contract include: (1) minors; (2) mental incompetents; and (3) intoxicated persons.
Plain English Explanation
Under the law, contracts are sacred. They are serious, legally binding agreements that require people to know what they are getting into. If you don't have the ability to appreciate the importance of a contract, because you aren't an adult, or you are intellectually disabled, or you are temporarily drunk or drugged up, then you were arguably lacking the capacity to enter into a contract.
Lack of capacity is a defense to both the enforcement of a contract and the formation of a contract.
Lack of capacity is a defense to both the enforcement of a contract and the formation of a contract.
Hypothetical
Hypo 1: Bob has 16 year old son named Timmy. To celebrate Timmy getting good grades, Bob throws a party, gets drunk, and then agrees to buy Timmy a car. When they get to the dealership, Bob is obviously drunk. The salesman has both of them sign the sales contract ordering a custom car to be delivered in a week. The next day, Bob, while hungover, realizes what he has done and calls to cancel the contract. Result: Bob lacked capacity to enter into the contract because he was drunk at the time, and noticeably so. Note that if he was inebriated but not obviously wasted, you could argue that the salesman could not have been aware of the lack of capacity and, thus, it should be a binding contract. As for Timmy, though he lacked the legal capacity to contract, it doesn't necessarily mean the contract is void. We'll discuss this in other cards but, in short, a contract with a minor is voidable by the minor, but may survive if all parties desire it to.
Visual Aids
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