Capacity of Parties to a contract

•  Competent parties are those persons legally and mentally capable of entering into agreements that are enforceable by law. In virtually all states a person is considered an adult at age eighteen for the purpose of making a contract.

•  Minors may usually disaffirm or avoid agreements they make any time before reaching majority or for a reasonable time thereafter. Adults, however, do not have this right and are found by the agreements they make with minors.

•  Minors cannot disaffirm agreements for the sale of real property to adults until they reach their majority. Statutes in many states prevent minors at varying ages from disaffirming certain agreements—as, for example, those related to life or accident insurance, a sale of stock, or an educational loan of money.

•  In most states, minors who deliberately lie and claim to have reached the age of majority may still disaffirm an agreement and recover only consideration paid.

•  Minors may ratify agreements they make with adults only after reaching majority. Once ratified, these agreements become legally binding, and the privilege to disaffirm terminates. However, minors cannot ratify part of an agreement and disaffirm another part. The entire agreement must be either ratified or disaffirmed.

•  Agreements made by persons under the influence of drugs or alcohol are voidable. Persons may, upon becoming sober, disaffirm or ratify an agreement made while intoxicated.

•  Agreements made by persons declared legally insane by a court are void. Agreements made by persons who suffer from temporary periods of insanity, but who have not legally been declared insane, are voidable.

•  Temporarily insane persons may, upon reaching a period of normalcy, disaffirm or ratify an agreement made while insane. Once ratified, the agreement may no longer be disaffirmed. 

•  All incompetent parties are liable for the reasonable value of necessaries furnished them.