Don’t Sign Deals Over Boozy Lunch: Capacity to Contract?
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:
- minors (i.e. anyone under the age of 18);
- mentally incapable individuals; and
- drunkards.
On the other hand, there are others whose ability to contract is limited for society’s protection. These include:
- convicted criminals;
- bankrupts; and
- 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.
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Joe Kafrouni, Accredited Specialist in Business Law, Kafrouni Law
Disclaimer: This article is general information only and is not legal advice. Before acting on it, get advice on your own circumstances. To the extent the law allows, Kafrouni Law accepts no liability for any loss arising from reliance on it. This article is the copyright of Kafrouni Law.
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