Element of Capacity in Contract Law Essay

Article I, section 10, clause 1 of the

United States Constitution

provides that “No State shall … pass any … impairing the Obligation of Contracts …” This is known as the contract clause, and shows just how important freedom of contract is to a fair and orderly society.

Yet, in this Unit, we’ve learned about an element of contract that impacts the ability of some people to enter contracts, the element of capacity.

Considering what you’ve learned about the element of capacity, and any research you complete to enhance your understanding of capacity, answer the following questions:

Do the limitations on contract imposed by the element of capacity make sense from a public policy perspective? What are we trying to achieve by limiting the rights of some people to contract?

Fully describe the differing outcomes for the following three contractual scenarios:

A minor who lives with his parents leases an apartment for a year. May the minor disaffirm after three months? What are the rights of the minor tenant and the landlord at the time the minor disaffirms?

A minor who does not have an adult to provide him shelter leases an apartment for a year. May the minor disaffirm after three months? What are the rights of the minor tenant and the landlord at the time the minor disaffirms? How is the resolution to this scenario different from the result in part A?

An adult leases an apartment for a year. May the adult disaffirm after three months? If the adult moves out of the apartment after three months, what are the rights of the adult tenant and the landlord at the time of the move out? How is the resolution to this scenario different from the result in part A and part B?