BUS 206 Chapter 16 summary

Case Initiator: Apple's Doubtful Contracts Apple was sued by parents of kids for promoting free

games that required in-game purchases. Parents who logged into these games saw charges

ranging from $99.99 to $338.72. Apple claims that while children are downloading these

programs, the contract at issue was the parents' agreement with Apple on the terms of service.

Apple claims that the account holder is responsible for any illicit logins or transactions made by

anybody using the account. Parents, however, contend that any in-game purchases made by

children are subject to separate contracts that may be revoked by a parent or legal guardian.

The third component of a binding contract is capacity. A person who is of legal age has the

mental capacity to comprehend his or her legal rights and duties, and is thus presumed to be

competent to abide by the conditions of the agreement. A natural person is said to be

incapacitated or incompetent if they have a mental or physical impairment that precludes them

from entering into a legally binding contract. A person may have restricted capacity, which

restricts them to just creating voidable contracts, or no capacity, depending on the type and

severity of their defect. Married women, juveniles, and those with mental illnesses were among

those with restricted or no capacity. Statues introduced more groups, such as those for whom

guardians had been appointed, including recurrent drinkers, drug users, spendthrifts, and the

elderly, and convicts. Today, married women have been removed from the category of those

lacking contractual capacity.

Minors The fact that children can only sign voidable contracts is one of the oldest restrictions on

capacity. An underage person is considered a minor in all but three states. When a person gets

emancipated before attaining the age of majority, they often gain full legal competence to sign

contracts. When a person gets emancipated before turning majority age, most governments grant

him or her complete legal authority to engage into contracts. When a minor's parents or legal

guardians relinquish their authority to manage them, usually when the child leaves home and

starts supporting themselves, this is known as emancipation. Frequently, the young person may

ask the court for a declaration of Disaffirmance of the Contract Minors have the right to nullify

or disaffirm their contracts until a reasonable amount of time after reaching the age of majority.

Simply the minor has this right. The minor need only demonstrate their purpose to retract the

contract via their words or actions.