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Don’t Sign Deals Over Boozy Lunch – Capacity to Contract?

By
John Kafrouni
01 Feb 2013
•
5
min read

There are people in society who are unable to fully appreciate the implications of agreements entered into. As a result, protection is provided to these individuals by the law in refusing to enforce contracts they enter into. Such protection is afforded to:

  1. minors (i.e. anyone under the age of 18);
  2. mentally incapable individuals; and
  3. drunkards.

On the other hand, there are others whose ability to contract is limited for society’s protection. These include:

  1. convicted criminals;
  2. bankrupts; and
  3. foreign citizens.

As always, there are exceptions to some of these rules. However, a business broker should avoid transactions involving such elements. If unavoidable, legal advice should be sought to ensure the party has capacity to contract.

Joe Kafrouni, Legal Practitioner Director, Kafrouni Lawyers

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The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. You should always consult your own legal advisors to discuss your particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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