Legal Capacity to Contract

Posted on: June 26, 2015

Fairfax contract attorneys who are involved in a dispute may consider whether each party had the requisite ability to contract as part of their support or defense.

People Who Lack the Ability to Contract

Fairfax contract attorneys can explain that certain individuals are considered to lack the necessary capacity to contract. For example, minors lack capacity. Likewise, mentally ill individuals lack capacity to contract.

Legal Effect

Lacking capacity means that these individuals are presumed to not know what they are doing. However, simply because they lacked capacity does not mean that the contract is automatically invalid. Instead, the party who lacked capacity to enter into the contract, at his or her choosing, can void the contract. This allows the incapacitated party from being forced into a contract that takes advantage of his or her lack of capacity. If the person wishes to continue the contract, this can be the end result. The other party does not have the right to use the incompetent party’s lack of capacity to get out of the contract.

Minor Capacity Issues

Minors usually do not have the requisite right to contract. However, there are certain exceptions. For example, minors may be responsible for contracts involving necessities like lodging or food. Additionally, if the minor becomes an adult by turning 18, he or she may be bound by the contract that he or she entered into before having capacity.

Mental Incapacity

The legal standard for capacity is that the party understood the contract and the effect of the contract. However, other tests have been used. For example, some courts apply a test in which a contract is voided if the other party knows of the incapacitated party’s inability to act in a reasonable manner. Another test assesses the individual’s ability to judge whether or not to enter into a particular contract.

Legal Assistance

If you would like more information on capacity issues, contact Fairfax contract attorneys at Schleifman Law, PLC.