Question 1

Can a minor sign a contract?

Accepted Answer

Technically yes, but the minor can void it at any time before turning 18 (and for a reasonable period after). The other party can't void it — only the minor can. Contracts for necessities like food, shelter, and medical care are the main exception. This is why smart businesses won't contract with minors without a parent's co-signature.

Question 2

What happens if someone signs a contract while drunk?

Accepted Answer

If they were so impaired they didn't understand what they were signing, the contract may be voidable. But they'd have to prove the level of impairment and that the other party knew or should have known. Courts set a high bar here — being 'a little tipsy' at a business dinner won't void your signature.

Question 3

How do you verify someone has authority to sign for a company?

Accepted Answer

Ask for a corporate resolution or board authorization. For smaller companies, check their operating agreement or bylaws for who has signing authority. You can also verify with the Secretary of State that the company is in good standing and the person is listed as an officer. Don't just take their word for it on big deals.

Question 4

Can a contract be voided for lack of capacity years later?

Accepted Answer

It depends. A minor can void a contract up to a reasonable time after turning 18 — usually a few months to a year. For mental incapacity, the window is longer but the person (or their guardian) must act within a reasonable time after regaining capacity or being appointed. Courts don't let people sit on capacity claims indefinitely.

Question 5

Does a corporation always have capacity to contract?

Accepted Answer

A corporation has capacity as long as it's in good standing with the state. If a business has been dissolved, suspended, or had its charter revoked, it may lack capacity. Foreign corporations operating in a state without proper registration can also face capacity issues. Check the state's business registry before signing major contracts.

Capacity

Definition

In Practice

Common in these contract types

Frequently asked questions about capacity

Create a contract with proper capacity clauses