Intro chủ đề (Tuyền)

1. Capacity

1.1. Contracts by Minors

1. Intro (định nghĩa Contractual capacity, minor, emancipation) (Quỳnh)

Introduce: Imagine that you see an ad online for a used computer. You respond to the
advertisement and after a few emails back and forth about the computer, you decide you
want to buy it. You want to enter into a contract with the seller for the purchase of their
computer. You are 30 years old, and the other person is just 17 years old. So the question is,
can this person enter the contract at age 17? In other words, does the 17-year-old have the
capacity to enter into the contract as a minor?

Contractual Capacity: a crucial concept to understand if you’re engaging in any kind of legal
contract or agreement. Contractual capacity is the legal term for an individual’s ability to
enter into a binding legal agreement. In the common law, there are three classes of persons
who are generally not considered to have sufficient capacity to be bound by their contracts:
minors, mentally impaired, incompetent persons; intoxication

Minors (infants)
A minor, in this case, is an individual who has not attained maturity. In virtually all states,
individuals under the age of 18 who are still under the obligation of parental support. Marriages
before the age of 18 has the effect that minors acquire full contractual capacity because
some states provide for the termination of minority on marriage.

Emancipation: a child’s parent or legal guardian relinquishes the legal right to exercise
control over the child. Normally, minors who leave home to support themselves are
considered emancipated. Several jurisdictions permit minors themselves to petition a court
for emancipation.

General rule: a minor can enter into any contract that an adult can, except contracts
prohibited by law for minors (e.g., agreement to purchase cigarettes or alcohol).

However, unlike those entered into by adults, contracts entered into by minors are
generally voidable by the minor. To exercise the option to avoid a contract, a minor need
only manifest (clearly show) an intention not to be bound by it.

For example: a 17-year-old entering into a contract with an adult wherein the 17-year-old
wants to purchase the other person’s car. If the minor wants to perform under the contract
by purchasing the car, then the other party is bound by the contract. If, however, the minor
decides not to purchase the car, then the other party need not satisfy the terms in the
contract.

2. The General Rule (Quỳnh)

3. Rules of disaffirmance (Vân)

Rules of disaffirmance uhu cóp qua nó dài ắ tại t ghi script zô luân

4. Exceptions of basic Rules of disaffirmance (Trux)

State courts and legislatures have carved out several exceptions to the minor’s right to
disaffirm.
For public-policy reasons, some contracts, such as marriage contracts and contracts to
enlist in the armed services, cannot be avoided.

- A growing number of states have enacted laws that prohibit minors who
misrepresented their age when entering into a contract from later disaffirming it.
(Normally, minors have a right to disaffirm even if they lied about their age, unless it
is prohibited by statute.)

- Finally, a minor who enters into a contract for necessaries may disaffirm the contract
but remains liable for the reasonable value of the goods. Necessaries are basic
needs, such as food, clothing, shelter, and medical services. What is necessary for
one minor, however, may be a luxury for another, depending on the minors’
customary living standard. Contracts for necessaries are enforceable only to the level
of value needed to maintain the minor’s standard of living

5. Ratification (Hương)
When a minor becomes an adult, ratification occurs and grants a previously unenforceable
duty legal authority. A minor who becomes an adult has two options for ratifying a contract:
expressly or implicitly.

+ After becoming an adult, express ratification occurs when the person makes it plain
that they want to be bound by the agreement, either orally or in writing.

+ When a minor proves their intent to uphold the agreement through their behavior
after turning 18, this is known as implied ratification.

The court decides whether a minor's actions constitute ratification or disaffirmance if they fail
to terminate the contract within a reasonable amount of time after becoming an adult.

For instance, Sara purchased a laptop from an electronics store when she was 17 years old,
and the conditions of the contract were agreed upon. Sara made the decision to confirm the
agreement she had made as a minor when she reached 18.
Sara notifies the electronics retailer of her desire to approve the transaction. She affirms her
willingness to carry out her responsibilities, such as paying the outstanding payment and
adhering to the warranty terms.

The electronics retailer accepts Sara's approval of the contract and believes it to be
enforceable. The original rights and duties of both parties continue to apply.

6. Parents’ Liability (Hương)

Parents are often not held responsible for their children's independent decisions in contracts
involving minors. However, to ensure that a contract can be enforced, firms frequently want
parental co-signature. Even if their child escapes accountability, parents who cosign the
contract are now personally responsible for upholding its terms. All parties concerned are
given an additional degree of accountability and assurance as a result.

1.2. Contracts by Intoxicated Persons (Hương)

1. The general rules

Alcohol or drug use can have a severe negative impact on a person's capacity for rational
thought and behavior, leading to intoxication. When a person signs a contract while
intoxicated, it may be voidable or still be valid.

The agreement may be declared voidable if an intoxicated individual doesn't have enough
mental capacity because of their level of drunkenness. Even though the party signing the
agreement was drunk, it may still be enforceable provided they understood its legal
ramifications.

Courts look at observable indicators of the drunk person's condition to assess their
competency.

2. Rules of disaffirmance

The procedure for nullifying a contract because of alcohol is called disaffirmance. The
drunken person must disaffirm either while still drunk or within a reasonable period of time
after getting sober. They might also have to give back any payment they received.

Contracts for necessities may also be voidable, although under a quasi-contract, the
intoxicated party is still accountable for the fair market value of the payment received.

3. Ratification

Once sober, an intoxicated individual can ratify a contract by affirming it explicitly or

implicitly. When someone breaches a contract after becoming sober but fails to renounce it
within a reasonable amount of time or behaves in a way that belies their intention to do so,
this is known as implied ratification.
For instance, John executes a contract to buy a car when quite inebriated. He makes the
decision to go ahead with the purchase the following day after becoming sober. John
believes he completely comprehends and accepts the contract's provisions despite his prior
intoxication. He gets in touch with the dealership to let them know he intends to approve the
sale and pledges to uphold the terms. The dealership recognizes John's approval,
establishing the legality and enforceability of the contract. As long as both parties uphold
their rights and duties, the car transaction can go ahead as scheduled.

1.3. Contracts by Mentally Incompetent Persons (Tuyền)

1. When the Contract Will Be Void

If a court has previously determined that a person is mentally incompetent, any contract
made by that person is void. the court appoints a guardian to represent the individual. Only
the guardian can enter into binding legal obligations on behalf of the mentally incompetent
person.

2. When the Contract Will Be Voidable

If a court has not previously judged a person to be mentally incompetent but the person
was incompetent at the time the contract was formed, the contract may be voidable. The
contract is voidable if the person did not know that he or she was entering into the contract
or lacked the mental capacity to comprehend its nature, purpose, and consequences. In
such situations, the contract is voidable (or can be ratified) at the option of the mentally
incompe- tent person but not at the option of the other party.

3. When the Contract Will Be Valid

A contract entered into by a mentally ill person (not previously declared incompetent) may
be valid if the person had capacity at the time the contract was formed. Some people who
are incompetent due to age or illness have lucid intervals—periods during which their
intelligence, judgement, and will are temporarily restored. During such intervals, they will
be considered to have legal capacity to enter into contracts.

Annabelle Duffie was mildly mentally retarded and, at age seventy, started suffering from
dementia. For her entire life, she had lived with her brother, Jerome. When Jerome died, he
left Annabelle his property, valued at more than $400,000. Less than three months later,
Annabelle signed a deed granting her interest in the tract to Charles and Joanne Black. The
Blacks agreed to pay Annabelle $150,000 in monthly payments of $1,000. Later, Annabelle’s
nephew, Jack, was appointed to be her legal guardian. On her behalf, Jack filed a lawsuit in
an Arkansas state court against the Blacks, seeking to void the land deal because of
Annabelle’s lack of men- tal competence. The court ordered the Blacks to return the
property to Annabelle. They appealed. A state inter- mediate appellate court affirmed. The
evidence showed that Annabelle had been incompetent her entire life. She lacked the
cognitive ability to make the complex financial decisions involved in selling property.
Therefore, the contract was voidable
 2. Legality (Notes: CCT Statute là (Quỳnh), CCT Public Policy chia 2 bạn (Vân cột trái + Trux
cột phải ))

Contracts to commit a crime: Anything that is illegal against a statute. For example, an
agreement to buy illegal drugs at a certain value, to buy all stolen cars of a particular thief,
etc. Any contract to commit a crime is in violation of a statute.

A lender who makes a loan at an interest rate above the lawful maximum commits usury.
Usury: The maximum amount of interest that can be charged on a contract or loan. In Texas,
you can obtain the principal and excess interest, as well as attorney fees.

Gambling: Gambling is the creation of risk for the purpose of assuming it. Any scheme that
involves the distribution of property by chance among persons who have paid valuable
consideration for the opportunity (chance) to receive the property is gambling. Here we are
talking about the classic gambling we all think about, such as Las Vegas, etc.

Licensing Statutes: All states require members of certain professions—including physicians,

lawyers, real estate brokers, accountants, architects, electricians, and stockbrokers—to
have licences. You cannot legally perform certain services if you do not have the proper
licence. Generally, the contract is unenforceable depends on the purpose of the licensing
statute. If the statute’s purpose is to protect the public from unauthorised practitioners,
then a contract involving an unlicensed practitioner is generally illegal and unenforceable. If
the statute’s purpose is merely to raise government revenues, a court may enforce the
contract and fine the unlicensed person.
Contracts Contrary to Public Policy : Some contracts are not enforceable because of the
negative impact they would have on society. Examples include a contract to commit an
immoral act, such as selling a child, and a contract that prohibits marriage.

- Contracts in Restraint of Trade : Contracts that tend to reduce competition for the
provision of goods and services in the market. However, an exception is recognized
when the restraint is reasonable and is contained in an ancillary (secondary or
subordinate) clause in a contract. Such restraints often are included in contracts for
the sale of an ongoing business and for employment contracts.

- Covenants Not to Compete and the Sale of an Ongoing Business: Many contracts
involve a restraint called a covenant not to compete (or a restrictive covenant)
- To be enforceable, geographic restrictions must be reasonable and must be
effective only for a reasonable period of time after the sale is completed.

- - Covenants Not to Compete in Employment Contracts: Agreements not to

compete (or noncompete agreements) may be included in employment
contracts.
- Employees cannot work for competitors or start competing businesses for a
specified period of time after termination of employment.
-
- Covenants Not to Compete in Employment Contracts:
- Noncompete agreements are legal in most states if the specified period of
time (of restraint) is not excessive and the geographic restriction is
reasonable.

- Unconscionable Contracts or Clauses: Contracts whose bargains are so

oppressive that the courts relieve innocent parties of part or all of their duties.
A court ordinarily does not look at the fairness or equity of a contract. They won't help you just because you
have made unwise or foolish bargains. In certain circumstances, however, bargains are so oppressive that the
courts relieve innocent parties of part or all of their duties.

- Procedural Unconscionability: This type of unconscionability typically arises

when a party’s lack of knowledge or understanding of the contract terms.
these situations may involve an adhesion contract (one that is written
exclusively by one party and presented to the other on a take-it-or-leave-it
basis).
- Substantive unconscionability occurs when contracts—or portions of
contracts—are oppressive or overly harsh.
 - For example, a car dealership may include a clause in a contract that
states the buyer cannot sue the dealership for any reason. This clause
is an example of substantive unconscionability because it unreasonably
favors the dealership and precludes the buyer's meaningful choice to
seek legal action if necessary.

- Exculpatory Clauses: Release a party from liability in the event of monetary or

physical injury—no matter who is at fault.
- Enforceable when they are not against public policy, are not ambiguous, and
do not shield parties from intentional conduct.

- Discriminatory Contracts: Party promises to discriminate on the basis of race,

color, national origin, religion, gender, age, or disability are contrary to both
statute and public policy, and unenforceable

3. Case Study thực tế (Chị My)

A) Case study 1: 2 questions (sau khi kết thúc phần Capacity)
Question 1:
Contracts by Minors. Kalen is a seventeen-year-old minor who has just graduated from high
school. He is attending a university two hundred miles from home and has contracted to
rent an apartment near the university for one year at $500 per month. He is working at a
convenience store to earn enough income to be self-supporting. After living in the
apartment and paying monthly rent for four months, he becomes involved in a dispute with
his landlord. Kalen, still a minor, moves out and returns the key to the landlord. The landlord
wants to hold Kalen liable for the balance of the payments due under the lease. Discuss fully
Kalen’s liability in this situation.

Answer:
The legal principle: Minors' ability to disaffirm contracts.
In this situation, Anna, as a minor, has the ability to disaffirm the contract and avoid liability
for the remaining rent payments.
Anna's actions, such as moving out and returning the key, demonstrate his intent to
disaffirm or cancel the contract. As a minor, Anna has the legal right to do that, because the
law recognizes that minors may not have the same level of understanding or capacity to
enter into binding agreements as adults do. Therefore, he is not liable for the remaining
rent payments. The fact that he paid rent for the first four months does not change his right
to disaffirm the contract. So the landlord can not make him liable for remaining payments
unless he reaches the age of majority.

Question 2:
Intoxication. After Kira had had several drinks one night, she sold Charlotte a diamond
necklace worth thousands of dollars for one hundred dollars. The next day, Kira offered one
hundred dollars to Charlotte for the return of the necklace. Charlotte refused to accept the
offer, claiming that she and Kira had a valid contract of sale. Kira explained that she had
been intoxicated at the time the bargain was made and thus the contract was voidable at
her option. Was Kira correct? Explain.

Answer: Kira was correct. The contract is voidable because Kira has proof that she was
genuinely intoxicated when she sold the valuable necklace for a significantly lower price.
Kira's capacity to understand the terms of the contract was impaired due to her intoxication.

Charlotte, on the other hand, cannot force Kira to honor the contract because Kira can
demonstrate that she lacked the mental capacity to make a reasonable decision at the time.
Therefore, Kira has the right to void the contract and request the return of the necklace.

B) Case study 2: (sau khi kết thúc Legality)

Question: PEMS Co. International, Inc. agreed to find a buyer for Rupp Industries, Inc., for a
commission of 2 percent of the purchase price, which was to be paid by the buyer. Using
PEMS’s services, an investment group bought Rupp for $20 million and changed its name to
Temp-Air, Inc. PEMS asked Temp-Air to pay a commission on the sale but Temp-Air refused,
arguing that PEMS had acted as a broker in the deal without a license. The applicable
statute defines a broker as any person who deals with the sale of a business.
a) What type of statute is in issue here?
b) If this statute was intended to protect the public, can PEMS collect its commission?
Explain.
https://quizlet.com/373919102/analyze-case-problem-blueprint-121-flash-cards/
Answer:
a) The type of statute in issue here is a licensing statute.
b) Since PEMS operated as a business broker without holding a license, they would likely not
be able to collect their commission. This is because the law seeks to protect the public from
unlicensed practitioners who may not adhere to the standards and guidelines set by the
 licensing authority. Therefore, without the required license, PEMS lack legal recourse to
enforce the terms of the agreement and will not be able to collect its commission.

Kịch Case Study

Dẫn truyện: Trúc

Case 1
Kalen: Diễm Quỳnh
Chủ nhà: Vân

Case study 1 :
Kalen is a seventeen-year-old minor who has just graduated from high
school. He is attending a university two hundred miles from home and
has contracted to rent an apartment near the university for one year at
$500 per month. He is working at a convenience store to earn enough
income to be self-supporting. After living in the apartment and paying
monthly rent for four months, he becomes involved in a dispute with his
landlord. Anna , still a minor, moves out and returns the key to the
landlord. The landlord wants to hold Anna liable for the balance of the
payments due under the lease. Discuss fully Anna ’s liability in this
situation.

- Anna : Diễm Quỳnh

- Landlord : Vân

Cảnh Lời Thoại

1. Cảnh 1 : ● Trux :
- Introduce Anna - After the first part “Contractual Capacity”, I
and the landlord : would like to ask for your opinion on the
- Theo lời dẫn, Anna và following case. We have Anna ,a seventeen-
chủ nhà sẽ đi ra theo thứ year-old minor who has just graduated from
tự high school.
● Lưu ý : Sẽ gthieu nhân
vật và tình hún theo case - She is studying at a university 200 miles
study, mng sẽ xuất hiện from home and has contracted to rent an apartment
lần lượt theo lời dẫn. near the uni for $500 per month. She is also working at
a convenience store to earn enough income to be self-
supporting. However, after paying 4 months rent fee,
she becomes involved in a dispute with his landlord.
 Theo lời dẫn chuyện tiếp theo, Anna , still a minor, moves out and returns the key to
Anna sẽ diễn cảnh trả lại chìa the landlord. He thinks everything is gonna be easy, but
khoá cho chủ nhà, nhưng bị lắc didnt expect it to be a difficult situation.
đầu. Sau phần gthieu xong tình
hún sẽ bắt đầu lời thoại

2. Cảnh 2 :
- Bt đầu cuộc tranh - Chủ nhà : I agree to let you move, but I ask you
cãi to comply with the contract, you have 8 months
( Lưu ý : tone giọng sẽ bắt đầu left.
từ thắc mắc, nhẹ nhàng sang ( kết hợp với body language, thái độ bề trên, tone
gay gắt và lên tone dần để thể giọng chắc và nghe phải áp đảo Kalen)
hiện sự quyết tâm)
- Anna: But I'm still a student and still working to
support myself. Taking on an extra $500 a month
in debt for a service I no longer use is too much
for me.
( thái độ còn đang giải thích, khá lo sợ và ấp úng)

- Chủ nhà : I don't care what your reasons are, you

signed the contract voluntarily, and now you're
breaking it. And since you're the wrong person,
you have to keep paying until the house contract
expires . You can't leave right away, I'll sue you if
you dare not pay me

( giọng điệu đanh hơn, mang ý đe doạ)

- Anna : I ask you to understand me, I can get

someone else to take my place and continue the
contract with you. Give me 1 month to find
someone suitable

( Tỏ vẻ hoảng sợ, vẫn còn hoang mang khi

nghe sẽ bị kiện)

- Chủ nhà : One month is too long, I need $500 per

month on a regular basis. And continuing the old
contract with someone else will not really
guarantee my rights. I don't care if you have
money or not, by all means you have to stick to
what you agree

( bắt đầu hét lên, tay chân khua khoắng và chỉ

mặt, tone giọng phải cao và đanh nhất có thể, chỉ
 mặt Kalen và đe doạ anh ta)

- Anna : You're pushing people too hard, I've tried

to do the best I can. But forcing a student like me
to pay $500 for the remaining 8 months is too
much, and I don't think I'm that wrong.

( bắt đầu phản ứng gay gắt hơn, lên tone giọng và
nói to rõ hơn, thái độ phản kháng rõ ràng nhưng vẫn
phải giữ vị thế người đang đúng)

- Chủ nhà : I think it's all your fault, do you have

anyone to prove that you're not wrong? Give me a
convincing explanation
( thái độ thách thức)

- Anna : ( quay qua hỏi tất cả mọi ng trong

lớp ) : I'm really confused as to whether I
have any liability for this. Please answer
for me

Case 2
Rupp: Hương
Pems: chị My
Temp Air: Tuyền
Case study 2 : PEMS Co. International, Inc. agreed to find a buyer for Rupp
Industries, Inc., for a commission of 2 percent of the purchase price, which was to be
paid by the buyer. Using PEMS’s services, an investment group bought Rupp for $20
million and changed its name to Temp-Air, Inc. PEMS asked Temp-Air to pay a
commission on the sale but Temp-Air refused, arguing that PEMS had acted as a broker
in the deal without a license. The applicable statute defines a broker as any person who
deals with the sale of a business.
a) What type of statute is in issue here?
b) If this statute was intended to protect the public, can PEMS collect its commission?
Explain.

Case 2

Cảnh Lời thoại

Cảnh 1 : Gthieu cảnh sign 1.1 Trux : The next case will be a little harder. I hope you
contract giữa 3 công ty will also answer the next question.

Trux : Pems agreed to find a buyer for Rupp Industries

for a commission of 2% of the purchase price, which was
1.1 : Contract của Pem và Rupp to be paid by the buyer.
Khi em giới thiệu về công ty và về
cảnh kí hợp, ng đại diện sẽ bước ra
và bắt tay để kí.
1.2 Trux : Using Pem’s service, an investment group
bought Rupp for 20 million and changed its name to
1.2 : Contract giữa investment Temp-Air.
group và Pems, Rupp changed its
name to Temp-Air 1.3 Trux : The CEO of PEMS asked the representative of
Temp-Air to pay a commission on the sale but Temp-Air
refused
1.3 : Sự mâu thuẫn của Pems và
(Bắt đầu cuộc hội thoại)
Temp - air

Cảnh 2 : Cãi nhau của Pems và - PEMS: Congratulations on your successful signing.
However, I think you now have to pay me the 2%
Temp-Air commission as agreed.

- Temp - Air : Thanks, but we're worried you won't get

that money.

- PEMS: What do you mean by that?

- Temp - Air: I'm sorry, but Temp-Air cannot pay the

commission. We believe your company acted as a broker
without the necessary license, which raises concerns
about the legality of the transaction.

- PEMS: But we've assisted numerous clients in similar

acquisitions, and we always deliver results. Our expertise
goes beyond that of a regular broker. The commission is
a fair compensation for our services.

- Temp- Air: We want to resolve this amicably, but we

must adhere to the law.
(Quay qua hỏi cả lớp)
Perhaps we need legal advice from professors. Do you
believe Temp-Air made the right decision? or can PEMS
collect its commission? Please answer in 3 mins.
●
4. Conclusion (Chị My)