What You'll Learn

  • Capacity and contract effect
  • Minors
  • Adjudicated and nonadjudicated incapacity
  • Intoxication
  • Ratification and restitution

Educational information only; not legal advice. This article is a general study aid and should be checked against current authority and course materials.

Status Effect

Void No legal contract from the beginning; neither party can enforce it.

Voidable Valid unless and until the protected party chooses to disaffirm.

Ratified The protected party, after capacity returns, adopts the contract and loses the power to avoid it.

Unenforceable An agreement may exist, but the law withholds a remedy for a separate reason.

2. Minors: The Contract Is Generally Voidable

A minor ordinarily may disaffirm before reaching majority or within a reasonable time afterward, unless the contract has been ratified. The adult party does not receive the same unilateral power to avoid.

● Disaffirmance: express words or conduct showing an intent not to be bound. ● Return of property: the minor generally must return property still possessed; jurisdictions vary on depreciation and full restitution. ● Necessaries: the minor may owe the reasonable value of food, shelter, clothing, medical care, or other necessities - not necessarily the contract price.

● Misrepresentation of age: the outlines note a jurisdictional split; the prevailing view may still permit disaffirmance, while some states protect an adult who reasonably relied on the misrepresentation.

3. Ratification Occurs Only After Capacity Returns

After reaching majority, the former minor may ratify by express language, conduct consistent with adoption, or failure to disaffirm within a reasonable time. Ratification validates the whole agreement, benefits and burdens together, and generally cannot be withdrawn.

4. Adjudicated Incompetence vs. Mental Incapacity

The outlines distinguish a person already placed under guardianship from a person whose impairment has not been adjudicated.

Situation Test and effect

Under guardianship by court order Contracts are generally void, although fair value for necessaries may still be recoverable.

Cognitive incapacity The person cannot understand the nature and consequences of the transaction; the contract is generally voidable.

Volitional incapacity The person cannot act reasonably in relation to the transaction because of mental illness or defect, and the other party has reason to know; the contract is voidable.

Mental weakness, poor judgment, or below-average intelligence alone is not necessarily incapacity. The focus is understanding or ability to act reasonably in the transaction, together with the knowledge requirement where the volitional test applies.

5. Intoxication

An intoxicated person’s contract is voidable when the other party has reason to know that intoxication prevents understanding of the transaction’s nature and consequences or prevents reasonable conduct concerning the transaction. Slight impairment is not enough. Because intoxication is often voluntary, the materials emphasize prompt disaffirmance after sobriety and restoration of received benefits where required.

Key Takeaway

Capacity doctrines protect vulnerable parties but do not always permit unjust enrichment. Even when the contract is void or voidable, the supplier may recover the fair value of necessary goods or services under restitution principles.

Key Takeaway

A seventeen-year-old buys a luxury motorcycle and disaffirms two weeks after turning eighteen, before any ratification. The contract is generally voidable at the minor’s option, though the buyer must return what remains and local law controls depreciation. Change the motorcycle to emergency medical treatment, and liability for reasonable value as a necessary becomes much stronger.

Exam Tip

Identify the category of incapacity; state void or voidable; ask whether the other party’s knowledge matters; determine whether and when disaffirmance occurred; test ratification; analyze return of benefits, necessaries, and restitution.

Common Mistake

Do not call every minor’s contract void. Do not allow ratification while the incapacity continues. Do not treat ordinary intoxication as enough. And do not forget that restitution rules vary and may preserve recovery for necessaries.

Primary Authorities

  • ● Restatement (Second) of Contracts § 15 (mental illness or defect).

  • ● Capacity, disaffirmance, ratification, and necessaries principles in the uploaded Contracts outlines.

Exam-ready conclusion

Capacity rules allocate the power to avoid. Minors and many impaired persons hold a protected option to disaffirm; adjudicated incompetence may make the transaction void; ratification and restitution determine what happens after capacity returns.