This lesson explores the capacity defense to contract formation, including when a contract may be avoided because of the minority, mental incapacity, or illiteracy of one of the parties.
On completion of the lesson, the student will be able to:
1. Distinguish between lace of capacity as a matter of law and lack of capacity as a matter of fact.
2. Explain the rules on whether minors can avoid contracts and the policies behind those rules.
3. Apply the different tests for lack of mental capacity to particular fact situations.