Who Cannot be Party to a Contract and When Does it Matter?

Contracts must meet certain requirements to be valid in California. Often, contracts are not examined for validity unless a dispute arises and one party takes legal action. Then, a party might allege that the contract is invalid because they could not legally enter into the agreement.

If a contract is deemed invalid, it can cause serious losses to the other party. On the other hand, if someone signs a contract who is not able to do so, they need protection from liability and contractual obligations. Always speak with an Encino business litigation attorney about any contract disputes.

Ineligible Parties

There are different parties who the law considers to be ineligible to contract with other parties. These include:

• Minors under age 18 – With a few exceptions, minors cannot sign contracts on their own. However, if a minor continues with the contract past the age of 18, the agreement can become valid, and the minor can no longer challenge the contractual obligation.
• Those with a lack of mental capacity – If a party did not have the capacity to understand the effect and meaning of the words in the contract, they should not be able to sign it. There are different tests to judge mental capacity and, sometimes, intoxication by drugs or alcohol can count as a lack of capacity to void a contract.
• Those under duress or coercion – If someone else is placing undue pressure on you to sign a contract, such as by threatening you or your family, the agreement should not be held valid.

Speak with an Encino Business Litigation Lawyer

If you have a contract dispute with your business involving a party trying to void a contract, you need an Encino business litigation attorney from Urbach Law Offices, PC, handling your case. Contact us online or call 888.212.9072 today.