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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