Continuing with our 'Crunching Concepts' series after our short break, we veer into the territory of 'capacity'. A crucial component in contract law as well as other fields, understanding capacity is both complex and crucial. Our goal in this session is to demystify this concept and highlight its significance in understanding contract law.
What is Capacity?
In the realm of contract law, capacity reflects a person's legal ability to enter into, comprehend, and be bound by a contract. An individual must possess the necessary mental and legal acumen to fully grasp the nature and consequences of a contract for it to be legally enforceable. In the UK, the question of capacity is central to determining the enforceability and validity of a contractual agreement.
Why is Capacity Important?
The gravity of the concept of capacity in contract law is multi-fold:
1. It guarantees fairness by ensuring that all parties involved in a contract have the suitable capacity to consent and adhere to its terms.
2. It can make a contract void, voidable, or unenforceable if a lack of capacity is proven.
3. It aids in preventing abuse of power, undue influence, and the possibility of unconscionable agreements.
Illuminating Capacity Through Case Law
Let's delve into capacity through the prism of these key cases:
• Etridge (No.2)  2 AC 773: This case set the guidelines for transactions involving individuals potentially under undue influence or lacking contractual capacity due to their relationship with another party.
• Chester v Afshar  UKHL 41,  1 AC 134: This case revolved around a patient agreeing to undergo surgery without being fully informed of the risks involved, underscoring the critical role of capacity and informed consent in a medical context.
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