1. Tomas Envall, Jenna Botic, Nathalie Kaufmann and Percy Coaguila Lack of capacity to contract

2. Presentation Introduction Definition of capacity Consequences Categories that may lack of capacity to contract Analysis

3. Introduction For a contract to appear there are four elements that has to be fulfilled: -both parties must have capacity to actually agree to a contract -offer and acceptance, both parties must be willing to enter into the agreement -consideration, the contract should be about something that has a value -legality of subject matter

4. Definition of capacity The ability, capability, or fitness to do something; a legal right, power, or competency to perform some act. An ability to comprehend both the nature and consequences of one's acts. (West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc.) Accountable for their actions and decisions Does not attain the legally defined level of mental ability to reach an agreement

5. Definition of capacity There is a meeting of minds of the parties Cannot form an intent may be a possibility for that party to deny the agreement

6. Consequences The agreement is voidable by that party that lacks capacity but it is enforceable against the party with legal capacity Can dismiss the contract anytime Difference between an agreement that is void and an agreement that is voidable

7. Categories Minors -minors: people under 18 years -right to disaffirmance, which is the annulment of the contract -the option to make the contract valid -exception is necessaries that the minor has used

8. Categories Intoxicated persons -not be able to understand the nature of the contract -must appear intoxicated to the other party -contract becomes voidable and each party must restore the other one to status quo

9. Categories Insane persons -includes both temporary and permanent mental illness -same position as a minor -if the sane party acted in good faith the insane person must refund what he received

10. Analysis The importance of lack of capacity in contract law The origin of the lack of capacity rule