1. CAPACITY 2.01 C Understanding Contract Law Understand elements and characteristics of a contract

2. Have you ever wondered what capacity is? Probably not? But when looking at a contract you need to be able to identify what Capacity is. So lets take a look at Capacity!

3. CAPACITY  Legal ability to enter into a contract Minors Mentally Incapacitated Intoxicated  A person serving a prison sentence lacks capacity.

4. MINORS  Minor – not yet reached legal age (age of majority)  NC Age of Majority – 18 years old  Emancipation - severing of the parent-child relationship  Formal – court decree  Informal – arises from the conduct of the minor and the parent  Parent and minor agree that parent will end support  Minor gets married  Minor moves out of family home  Minor joins armed forces  Minor gives birth  Minor takes on full-time employment  Ratification – agreeing to be bound by a contract that could be avoided  Contracts made by minors are voidable; minors may disaffirm (or avoid being bound by) contracts

5. MENTALLY INCAPACITATED  Lacking the ability to understand the consequences of his or her contractual acts  Severe mental illness  Severe mental retardation  Severe senility  Contracts made by mentally incapacitated are usually void unless involving necessaries.

6. INTOXICATED  People under the influence of drugs or alcohol  Intoxication is a voluntary act.  Most courts are reluctant to consider contracts entered into by intoxicated individuals as voidable.  Must be so intoxicated that the person did not know they were contracting.