LAWS1100 Lecture Notes - Lecture 5: Collateral Contract, Browse Wrap, New Ferry
Document Summary
Capacity to contract: parties must have contractual capacity for a contract to exist, people who lack capacity to contract are prohibited by law from entering legal contracts, reason: to protect vulnerable people from possibility of exploitation. Intoxicated persons (of unsound mind/taken advantage of) are considered with insufficient legal capacity to contract. If an intoxicated person wishes to proceed with the contract, they can affirm the contract within reasonable time when period of intoxication ends: party seeking to withdraw from the contract need to prove, 1. That they were suffering from such a disability: 2. That the other party was aware of it: see: blomley v ryan (1954) Illegality under common law: certain contracts are categorised by the common law as illegal and unenforceable. Including: contracts to commit a crime or a tort, contracts that promote corruption in public office, contracts intended to evade the payment of tax, contracts that prevent or delay the administration of justice.
