Lack of Capacity

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A contract entered into by someone who lacks the legal capacity to enter contracts is voidable by that person.

People who lack the legal capacity to enter into contracts are minors and people with mental deficiencies. The Restatement Second of contracts defines people with mental deficiencies as those who are unable to act in a legal manner.

Please note that, although these contracts are voidable by the party who lacks the legal capacity to enter into the contract, the contract is enforceable against the party with legal capacity. For example:

The Boston Red Sox sign Ramon Garcia to a three-year contract worth $5 million. Garcia is seventeen years old when he signs the contract. Because Garcia is a minor, he lacks the legal capacity to enter into a contract. Therefore, the contract is voidable at his option and he does not have to play for the Red Sox if he chooses not to. However, the Red Sox are bound by the contract and Garcia can enforce the contract against the team.

Note the difference between a contract that is void and a contract that is merely voidable. A void contract is meaningless to begin with while a voidable contract is a valid contract except that it can be affirmed or rejected at the option of one of the parties. Therefore, a contract entered into by a minor is enforceable at the discretion of the minor.



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