Chapter 4: Policing the Bargain
Section 1: Competency to Contract
A. A person attains majority at the age of 18 in most states
1. Prior to this all contracts made are voidable
i. Voidable and therefore the contract is not absolutely void, but may be annulled or affirmed at the instance of the party entitled to invoke that action
ii. Therefore the minor can disaffirm the contract at any time before attaining the age of majority or shortly there after depending upon state law.
B. Halbman v. Lemke (see Case Brief)
1. Facts: Lemke sought restitution for damages caused to a car by Halbman, a minor, before he disaffirmed the purchase.
2. Rule of Law: Absent misrepresentation or tortuous conduct, a minor who disaffirms a contract for the purchase of a none necessity may recover his purchase price without liability for damage, depreciation, or other diminution in value
C. Webster Street Partnership v. Sheridan
1. A disaffirming infant is liable only for the value of “necessaries’ supplied under the contract
D. Note: Limit on disaffirmance
1. Doctrine of Necessaries-a minor is not liable for necessaries furnished on someone else’s credit.
2. A minor’s right to disaffirm survives for a “reasonable time” after reaching the age of majority
3. Sharon v. City of Newton-contentions was the argument that allowing the parent to do what the minor cannot do violates public policy
E. Situations in which a minor may incur legal liability
1. Necessaries-goods or reasonably need for the minor’s livelihood
2. Emancipated-married/sets up a home; where the minor has become independent of parents, is not supported by them and has moved away from them to establish her own home.
II. Mental Competence
A. The fundamental idea of a contract is that it requires the assent of two minds. But a person non compos mentis, upon principle, cannot make a contract that will have any efficacy as such
1. This is now by most states seen as voidable instead of void
B. Means provided for pro
asonable manner in relation to the transaction and the other party has reason to know of his condition.
ii. Where the contract is made on fair terms and the other party is without knowledge of the mental illness or defect, the power of avoidance under Subsection (1) terminates to the extent that the contract has been so performed in whole or in part or the circumstances have so changed that avoidance would be unjust. In such a case a court may grant relief as justice requires.
a. Where the contract has been performed in whole or in part, avoidance is permitted only on equitable terms
E. Ortelere v. Teacher
Facts: the deceased had a nervous breakdown in March 1964. In July 1964 her psychologist described her to be incompetent and game her antidepressants but discontinued because she