1. Capacity to Contract

2. Capacity to Contract Capacity – legal ability to enter a contract
Majority – age of legal adulthood
Minor – not yet reached legal age (minority)
NC Age of Majority = 18 years old
Voidable Contracts – minors may disaffirm or avoid their contracts if they so choose
Infancy = minority = minor = under 18 yrs old

3. Capacity to Contract
Returning Merchandise – must be returned if disaffirming a contract
Tender – offer to return
Misrepresenting Age – fraud
- if contract disaffirmed, you may be sued for fraud

4. Capacity to Contract
Disaffirming the Whole Contract - can’t disaffirm parts of a contract
-- must disaffirm all or none
Disaffirming Contracts made with Minors
– both can disaffirm contact

5. Ratification of Contracts with Minors
Ratify – approve contract
- after reaching majority age, a minor can ratify a contract made while he or she was a minor
- ratification ends all rights given to a minor
Contracts for Necessaries – necessities – food, clothing, shelter, and medical care
- responsible for the fair value of item

6. Ratification of Contracts with Minors
Special Statutory Rules – minors have capacity to buy car/life insurance
- married = adult
- limited capacity if you own a business
- renting apartment is a necessity

7. Other Contractual Capacity Rules
Mentally impaired persons – if declared insane:
Prior to guardian being appointed – Contract is voidable
After guardian appointed - all contracts are void
Intoxicated person – must not understand the purpose, nature, or effect of the transaction
- fair value of necessities

8. Other Capacity Limitations
Convicts have certain limitations
Aliens – people who live in U.S. but own allegiance to a different country
- limited capacity
ex: war