Contract Formation Discussion 2: Post 2 Capacity, Mistake & Fraud Rule

Discussion 2

Tom, Stacey’s sole survivor and her very mature and intelligent 17 year old son, who graduated from high school early and is a Senior in College, where he has completed his business law class. He wants to continue live in the new home under construction, but wants to turn the property into a horse breeding ranch and build a 16 unit stable. He contacts Siegel who learns that Tom is about to graduate from college. As Siegel prepares the contract for Tom, he asks, “You are old enough to do this right?” Tom agrees he is a senior in college and signs an additional contract for the completion of a 16 unit stable for $65,000, due upon completion.  A year later the Stable Project is completed, and Siegel asks for his final payment of $65,000.  Tom never replies, and finally Siegel files suit for recovery of his $65,000.

Do not discuss contract questions of Agreement – offer and acceptance, or Consideration.  Limit this discussion to legal theories covered in Chapters 14 & 15.

Using F-IRAC consider the Contract Formation questions for this contract between Tom & Siegel.

Contract Formation Discussion 2: Post 2 Capacity, Mistake & Fraud Rule Answer

As a general rule, minors can enter into any contract that an adult can, except in cases where the content of the contract is prohibited by law as in the case of sale of liquor to minors. However, the contract entered into by a minor can be voided at the option of the minor but subject to some exceptions. In order to avoid the contract, the minor need only to manifest an intention not to be bound by the contract. This process is known as disaffirmance.