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Incapacity and Illegality Defenses in Contract Law

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Necessaries and Minors

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Contracts for necessaries (basic needs like food, clothing, shelter) with minors may be enforceable to ensure the minor's survival and well-being.

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Misrepresentation

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Contracts based on misrepresentation are voidable if the misled party entered the contract relying on incorrect information.

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Duress affecting capacity

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Contracts entered into under duress, where one party is forced to act against their will, are voidable.

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Undue Influence

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A contract is voidable if one party exerts undue influence over the other, overcoming their free will.

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Illegal Purpose and Contracts

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Contracts with an illegal purpose, such as agreements to commit crimes, are void from the outset.

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Intoxication and Contracting

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Contracts entered into while one party is intoxicated can be voidable if the intoxication impaired their capacity to understand the nature of the contract.

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Usury and Illegality

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Contracts with illegal interest rates or terms (usury) are unenforceable or subject to statutory interest rate limits.

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Illegality due to Statutory Violation

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Contracts that require the breach of law are void and unenforceable.

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Ratification of Minor's Contract

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If a minor affirms a contract upon reaching the age of majority, it becomes binding and the voidability is removed.

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Incapacity due to Limited Understanding

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Contracts with individuals who have limited understanding due to factors such as age or cognitive impairments may be void or voidable.

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Mental Incapacity

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A contract is voidable if one of the parties was mentally incapacitated and unable to understand the nature and consequences of the transaction.

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Contracts Involving Restraint of Trade

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Contracts that unreasonably restrain trade or competition may be void as against public policy.

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Contracts Promoting Corruption

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Contracts that involve bribes or that promote corruption are void as they violate ethical and legal standards.

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Incapacity due to Illiteracy

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Contracts with illiterate parties may be voidable if the incapacity to read or understand the terms was exploited.

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Licensing Requirements and Contract Enforcement

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Contracts entered into without a required professional license may be void if the license is mandatory for public protection.

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Minor's capacity to contract

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Contracts with minors are voidable at their option due to their lack of legal capacity to enter binding agreements.

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Contracts Contrary to Public Policy

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Contracts that are in violation of public policy are unenforceable. Public policy is determined by prevailing societal norms and legal principles.

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Disaffirmance by Minors

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Minors may disaffirm contracts, which releases them from any contractual obligations, often without having to return consideration received.

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Status of Void v. Voidable

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Void contracts are null from the start, while voidable contracts may be affirmed or rejected by the party with the power to void.

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Contractual Capacity and Elderly

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Contracts with elderly individuals may be voidable if issues such as diminished capacity or susceptibility to undue influence are present.

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