B_LAW 210 – 1st Edition Lecture 10 Outline of Last Lecture 1. Contractsa. Types of Contracts2. Offersa. Elements of an Offer3. AcceptanceOutline of Current Lecture I. CapacityII. LegalityCurrent Lecture- Who does not have Capacity?- Minors (under 18)- Mentally incompetent (can’t understand what they are agreeing to)*- Intoxicated people (courts don’t like this one)- If a person lacking capacity signs a contract, it is generally voidable at any time up to the removal of the disability: o A reasonable period after the removal o After turning 18 in the case of a minoro If someone is adjudicated mentally incompetent, the contract is void:  EX: A judge declares someone to be legally insane. EX: A guardian has been appointed by a judge.- Disaffirmance: The legal avoidance, or setting aside, of a contractual obligation.o If there is a disaffirmance, the disaffirming party must return the goods or money(or pay for the value of the use)- Ratification: The act of accepting and giving legal force to an obligation that previously was not enforceable.o Can be shown by conduct: EX: Eighteen year-old keeps a car a year after birthday-he can’t disaffirm.- Minors cannot disaffirm:o A marriage contractThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.o Student loano Insuranceo NecessariesLegal Contracts:- You cannot enter into a contract in violation of public policyo Against a statute (can’t charge interest at a rate higher than allowed by law)o To commit a crime (dump waste in the river)o To act without a required license (repair car without license)- Non-compete clause can be against public policy unlesso Legitimate business purpose (not punishment)o Reasonable in time and scope- Unconscionable: when you shift risk unreasonably (uneven bargaining power):o Contract can be unconscionable on either procedural or substantive grounds.o EX: Small print on a contract that says you cannot return a $5,000 TV for any reason, even if it doesn’t work (or severe penalty for failure to perform).o EX: You sell a $900 fridge for $4,500.- Exculpatory clauses – can be against public policyo Circumstance (if you owe a public duty – like an airlines)o Relationship (Doctor – Patient)o Language (Some statutes do not allow exculpatory clauses) – T cannot be forced to waive a LL’s grossly negligent or intentional