Defenses to Contract Law Enforcement: illegality, Minor, Intoxication. CPA Exam REG
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In this video, I discuss
In this video, I discuss defenses to contract such as illegality, minor, intoxication, mental incapacity.
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Illegality in a contract arises when either the subject matter of the contract or the consideration involved is illegal. In such cases, the contract is typically deemed void, meaning it's treated as if it never existed and is unenforceable by law. Examples of illegal contracts can include those involving criminal activities, violations of trade laws, gambling, or usury.
Example of Illegality in a Contract:
Scenario: Rachel agrees to pay Alex $50,000 to hack into a competitor's computer system to obtain confidential business information.
Illegality: The contract involves committing a crime (hacking into a computer system) which is illegal. Additionally, the purpose of the contract (obtaining confidential information) is also illegal, as it involves breaching privacy and proprietary laws.
Outcome: The contract between Rachel and Alex is void. Since both the action required (hacking) and the objective (acquiring confidential information) are illegal activities, the law will not recognize or enforce this contract.
In contract law, the enforceability of a contract can be affected by whether or not a party has a required license. The key factor here is the purpose of the license.
When a license is required for public protection, such as in the case of professions like certified public accountants (CPAs), attorneys, doctors, and real estate agents, not having the license makes the contract void. This means that even if the unlicensed professional performs the service, they cannot legally demand payment.
However, if a license is required merely for the purpose of generating revenue for a governing body — like a vendor's license at a fair — the lack of such a license does not typically render the contract unenforceable.
n contract law, minors (typically individuals under the age of 18) have a special right when it comes to contracts. They can disaffirm, or cancel, a contract at any time while they are still minors, or within a reasonable period after they reach adulthood. When a minor disaffirms a contract, they must usually return any goods or property they still have from the agreement. However, the minor's age cannot be used by the other party in the contract as a reason to avoid fulfilling their own obligations.
Once a person reaches the age of majority, they can become legally bound to the contracts they entered into as a minor. This can happen in three ways: if they don't disaffirm the contract within a reasonable time after turning 18, if they explicitly agree to the contract either orally or in writing, or if they keep or continue to use the benefits they received from the contract.
Void Contract:
Intoxication can be a valid defense for not upholding a contract, but only under specific circumstances. This defense applies if the person was so intoxicated at the time of making the contract that they were unable to understand the nature and consequences of their promise. Additionally, for this defense to be valid, the other party involved in the contract must have been aware of the person's intoxicated state.
Definition: A void contract is one that is not legally valid from the outset. It is as though the contract never existed and thus has no legal effect.
Reasons for Being Void: Contracts are typically considered void if they involve illegal activities, lack one or more essential elements (like mutual consent, lawful subject matter, consideration, or competent parties), or if they are based on fraud in the execution.
Enforceability: A void contract cannot be enforced by either party. Even if both parties agree to the terms, it cannot be legally upheld.
Example: A contract for an illegal activity, such as selling prohibited substances, is void.
Voidable Contract:
Definition: A voidable contract is a valid contract that can be legally voided at the discretion of one of the parties. Until it is voided, it remains effective and enforceable.
Reasons for Being Voidable: Circumstances such as misrepresentation, undue influence, coercion, or a party's incapacity (like being a minor) can make a contract voidable.
Enforceability: The key aspect of a voidable contract is that it is enforceable until the party with the power to void it chooses to do so. If the aggrieved party decides to affirm the contract, it remains valid.
Example: A contract signed under duress, where one party was coerced into agreement, is voidable at the discretion of the coerced party.
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Illegality in a contract arises when either the subject matter of the contract or the consideration involved is illegal. In such cases, the contract is typically deemed void, meaning it's treated as if it never existed and is unenforceable by law. Examples of illegal contracts can include those involving criminal activities, violations of trade laws, gambling, or usury.
Example of Illegality in a Contract:
Scenario: Rachel agrees to pay Alex $50,000 to hack into a competitor's computer system to obtain confidential business information.
Illegality: The contract involves committing a crime (hacking into a computer system) which is illegal. Additionally, the purpose of the contract (obtaining confidential information) is also illegal, as it involves breaching privacy and proprietary laws.
Outcome: The contract between Rachel and Alex is void. Since both the action required (hacking) and the objective (acquiring confidential information) are illegal activities, the law will not recognize or enforce this contract.
In contract law, the enforceability of a contract can be affected by whether or not a party has a required license. The key factor here is the purpose of the license.
When a license is required for public protection, such as in the case of professions like certified public accountants (CPAs), attorneys, doctors, and real estate agents, not having the license makes the contract void. This means that even if the unlicensed professional performs the service, they cannot legally demand payment.
However, if a license is required merely for the purpose of generating revenue for a governing body — like a vendor's license at a fair — the lack of such a license does not typically render the contract unenforceable.
n contract law, minors (typically individuals under the age of 18) have a special right when it comes to contracts. They can disaffirm, or cancel, a contract at any time while they are still minors, or within a reasonable period after they reach adulthood. When a minor disaffirms a contract, they must usually return any goods or property they still have from the agreement. However, the minor's age cannot be used by the other party in the contract as a reason to avoid fulfilling their own obligations.
Once a person reaches the age of majority, they can become legally bound to the contracts they entered into as a minor. This can happen in three ways: if they don't disaffirm the contract within a reasonable time after turning 18, if they explicitly agree to the contract either orally or in writing, or if they keep or continue to use the benefits they received from the contract.
Void Contract:
Intoxication can be a valid defense for not upholding a contract, but only under specific circumstances. This defense applies if the person was so intoxicated at the time of making the contract that they were unable to understand the nature and consequences of their promise. Additionally, for this defense to be valid, the other party involved in the contract must have been aware of the person's intoxicated state.
Definition: A void contract is one that is not legally valid from the outset. It is as though the contract never existed and thus has no legal effect.
Reasons for Being Void: Contracts are typically considered void if they involve illegal activities, lack one or more essential elements (like mutual consent, lawful subject matter, consideration, or competent parties), or if they are based on fraud in the execution.
Enforceability: A void contract cannot be enforced by either party. Even if both parties agree to the terms, it cannot be legally upheld.
Example: A contract for an illegal activity, such as selling prohibited substances, is void.
Voidable Contract:
Definition: A voidable contract is a valid contract that can be legally voided at the discretion of one of the parties. Until it is voided, it remains effective and enforceable.
Reasons for Being Voidable: Circumstances such as misrepresentation, undue influence, coercion, or a party's incapacity (like being a minor) can make a contract voidable.
Enforceability: The key aspect of a voidable contract is that it is enforceable until the party with the power to void it chooses to do so. If the aggrieved party decides to affirm the contract, it remains valid.
Example: A contract signed under duress, where one party was coerced into agreement, is voidable at the discretion of the coerced party.
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در تاریخ 1402/09/19 منتشر شده
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