Restatement (Second) of Contracts

Definition

The Restatement (Second) of Contracts is a legal treatise that provides a comprehensive summary of the principles and rules governing contracts in the United States. It serves as an authoritative guide for courts and legal practitioners, helping to clarify and unify contract law by restating existing legal doctrines in a more organized manner. This resource aids in understanding how capacity and legality affect the enforceability of contracts.

5 Must Know Facts For Your Next Test

1. The Restatement (Second) of Contracts was published in 1981 and aims to provide clarity on common law contract principles in the United States.
2. It is not legally binding but is often used as persuasive authority in court cases when resolving contract disputes.
3. Key concepts covered include formation, performance, breach, and remedies, with specific attention to the effects of capacity and legality on contract enforceability.
4. The Restatement reflects changes and developments in contract law since the first Restatement was published in 1932, adapting to modern legal practices.
5. Judges and lawyers often refer to the Restatement for guidance on interpreting contractual terms and understanding the underlying legal principles.

Review Questions

• How does the Restatement (Second) of Contracts clarify the concepts of capacity and legality in contractual agreements?
  • The Restatement (Second) of Contracts clarifies that capacity refers to the ability of parties to understand and engage in contract formation, while legality emphasizes that a contract must have a lawful purpose. It provides guidelines on how different factors like age or mental competency can affect a party's capacity, ultimately influencing whether a contract can be enforced. By restating these concepts, it helps ensure that parties entering contracts are aware of their rights and obligations.
• Discuss how the Restatement (Second) of Contracts impacts the enforcement of contracts with respect to minors and mentally incapacitated individuals.
  • The Restatement (Second) of Contracts specifies that contracts entered into by minors are generally voidable at the minor's discretion, meaning they can choose to affirm or reject the contract upon reaching adulthood. Similarly, if an individual is found to be mentally incapacitated at the time of contract formation, such agreements may also be voidable. This clear delineation assists courts in deciding cases where capacity issues arise, ensuring fairness in contractual relationships.
• Evaluate the significance of the Restatement (Second) of Contracts in shaping modern contract law and its implications for future legal developments.
  • The Restatement (Second) of Contracts plays a critical role in shaping modern contract law by providing a consolidated framework that reflects contemporary legal practices and principles. Its influence extends beyond merely guiding courts; it informs legislative actions and helps educate legal practitioners about evolving standards in contract enforceability. As societal norms change, the Restatement serves as a living document that can adapt, ensuring that contract law remains relevant and fair in addressing new challenges that arise within commercial transactions.

Related terms

Capacity:

The legal ability of a person to enter into a binding contract, which can be affected by factors like age, mental state, and intoxication.

Legality: The requirement that a contract must have a lawful purpose; contracts that violate laws or public policy are unenforceable.

Contractual Obligations: The responsibilities and duties that parties agree to undertake in a contract, which can be affected by issues of capacity and legality.