Introduction:

Students have learned about the first two elements of a legally binding contract: Agreement and Consideration. Capacity is the third element of a legally binding contract. A person who has legal capacity to contract is one who has the mental ability to understand their rights and obligations under a contract. Incapacity, as defined by the law, is some sort of mental or physical defect that prevents a person from being able to enter into a legally binding contract. Depending on the nature and extent of the defect, a person may have either no capacity, and therefore any attempted contract is void, or limited capacity, resulting in the ability to form only voidable contracts.

Concept Review:

One of the oldest limitations on capacity is the ability of minors to enter into only voidable contracts. In most states, a minor is someone under the age of 18. Because their contracts are voidable, minors have the right, until a reasonable time after reaching the act of majority, to disaffirm, or avoid, their contracts.

Case:

Please read CASE 11-1: Adrian Lopez v. Kmart Corp., 2015 U.S.Dist Lexis 58328 (2015).

DISCUSSION REQUIREMENTS

Answer either the Critical Thinking Question OR theEthical Decision Making Question. (Pick one!) Be sure to define critical terms.

• Critical Thinking Question: Kmart's attorney argued unsuccessfully that by allowing the minor to disaffirm the employment, the court was discouraging employers from hiring minors in the future. Do you think the court should have given more weight to this argument? As part of your answer, please define disaffirm (or disaffirmance) and minor.

OR

• Ethical Decision Making: What values were in conflict when the court made this decision? As part of your answer, please define values, as defined in Chapter 2, and define the values you choose to discuss