LAW OF PERSONS LEARNING UNIT 3:
LAW OF PERSONS LEARNING UNIT 3:
THE ASSISTED CONTRACT:
So unassisted minors incur no binding contractual obligations.
Assisted minors incur binding contractual obligations in the same way as majors.
The reasons that minors have limited contractual capacity is to protect them from their inexperience and immaturity of judgment.
If they have the informed consent of their guardians, this consideration falls away - the minor contracts with the benefits of the guardians wisdom and experience.
If minors act with their guardians assistance they are indeed contractually liable ( liable
) in exactly the same way as majors.
If people are liable in contract, they can be sued for specific performance of everything they agreed to AND can also be sued for breach of contract.
THE MINORS LIABILITY:
When minors conclude assisted contracts, THEY are bound by the terms of the contract NOT their guardians. This means that if a minor doesn't perform as agreed, the other party must sue the minor they CANNOT choose to sue the guardian instead.
This rule applies even in situations when the guardian him/herself sigs the contract on behalf the minor child.
It is ALWAYS the minor which incurs the legal rights and obligations NOT the guardian.
A guardian could sometimes be liable when a minor gets involved in a contract with the guardians assistance.
FIRST) The guardian will be liable if he/she provides SURETY for the minors debts. This does NOT mean that the guardian is liable in terms of the minors contract., the reason that the guardian is liable in this situation is because he/she is bound by his/her own contract- The contracts of SURETYSHIP.
SECOND) The guardian will be contractually liable if the minor acted as the guardians agent. Here the contract is between the guardian and the third party. The minor has signed the contract but NOT on his/her own behalf, this is not the minors contract.
In some circumstances the guardian will be liable on the grounds of unjustified enrichment OR
. Liability on the grounds of enrichment or
arises where a third party provides a minor with necessaries such as food and clothing.
The third party has a claim against the parents, because it is the parents' duty to maintain their children. However the parent/guardian is NOT bound in contract in ANY way.
The third party cannot insist that the guardian pays any outstanding contractual balance.All the third party can claim is FACTUAL enrichment -in the case of the enrichment claim- OR reasonable expenses -if using the
RESTITUTIO IN INTEGRUM:
Under certain circumstances minors may be able to get out of binding contracts. The most powerful remedy available is the
restitutio in integrum
The purpose of the remedy is to restore the contracting parties to exactly the same position that they would have been in if they had NOT entered into the contract in the first place and thus restoring the
status quo ante'
. - the way things were before -.
The court will try to achieve this by cancelling the contract and ordering the parties to return anything that they received as a result of the contract, including fruits and profits.
The remedy is available to ALL contracting parties including majors in SOME situations ie if a contract has been induced by fraud/duress.
The minor is able to use the remedy in circumstances not available to majors SPECIFICALLY when the contract was prejudicial to the minor at the time the minor entered into the contract.
REQUIREMENTS FOR MINOR
RESTITUTIO IN INTEGRUM
1)The minor was indeed a minor at the time he/she entered into the contract.
2) The minor is bound by the contract (implies he/she had the assistance of the guardian/court).
3) The court was inherently prejudicial to the minor at the time he/she entered into the contract.
Minors may apply for restitutio in integrum BEFORE attaining majority with the asisstance of their guardians.
Guardians can also apply for the remedy on the minors behalf. If the guardian fails to assist the minor in litigation , a
curator ad litem
may be appointed. Minors can also wait until they have become majors and then sue on their own behalf. Former minors cannot use the remedy if they have ratified their contracts after attaining majority.
Another danger of waiting till majority is that the remedy might prescribe/expire.
The remedy CANNOT be used to get out of a marriage/to escape liability for crimes and delicts.
The remedy is probably available to emancipated minors, but is DENIED to fraudulent minors.
THE UNASSISTED CONTRACT:
The unassisted minor cannot incur binding contractual liability.
Limping contract (
One strong point and one weak point.
- THE MINOR'S REPUDIATION:RESILING WITH IMPUNITY:
A major who contracts with an unassisted minor is in a very weak position: The major party will have full contractual obligations, but the minor has no contractual obligations.
The minor can
resile with impunity
He/She can just withdraw from the contract without fearing the consequences.
Thus the minor can choose to repudiate the contract and the major party will not be able to do anything.
If a minor wishes to enforce performance by the other party, he/she must fulfill his/her own corresponding obligations.
The other party to the contract who is a major, cannot enforce performance from the minor. If the major sues the minor for performance, the minor can raise their minority as a defence.
- WHAT IF THE MINOR HAS ALREADY PERFORMED?
If already performed in terms of an unassisted contract, he/she can reclaim performance either with (
- If the performance was in money) OR with the
(if the performance was in the form of property).
The minors claim might be reduced if he/she has derived some form of enrichment as a result of the contract.
WHAT IF THE MAJOR HAS ALREADY PERFORMED?:
What happens if the minor repudiates the contract after the major party has already performed?
There is an unassisted minor, which means he/she can NOT incur any contractual obligations, thus the major party has NO contractual remedy and can NOT sue the minor. But the major party CAN use unjustified enrichment as a remedy. This remedy however is VERY WEAK and not as STRONG as a contractual remedy.
This remedy is VERY WEAK, whilst contractual remedies are VERY STRONG.
There is unjustified enrichment when one persons estate is increased at the expense of another without legal cause.
The claim is based on the factual enrichment of one party over the other and is LIMITED in TWO important ways:
1) The plaintiff can sue only for the amount by which he/she is in fact impoverished.
2) He/She can sue only for the amount by which the minor defendant remains enriched on the day action is instituted.
There are various ways in which minor parties could reduce the extent of their remaining enrichment.
They might lose or destroy the thing.
Sell the thing for less than it's actual value.
Sell the thing and spend the proceeds on luxuries that they would NOT ordinarily buy.
The minor is liable only for the amount that still remains in his possession at the time of the action or the surrogates of such residue.
The surrogates are the things that replaced the thing by which the minor had been enriched.
The minor will still be enriched if he has spent the money through necessity OR if it would in any event have had to come out of his estate.
The remedy used to recover any remaining enrichment is called the
This means the conduct which rectifies an error in a specific juristic act so that the juristic retrospectively becomes fully valid and enforceable.
Doing something afterwards to fix/rectify an error in a juristic act with retrospective effect.
ie In the context of the minors unassisted contract, the problem in the juristic act is consent, thus the minor is NOT bound by the contract and thus have a limping contract.
The problem can be fixed by ratification.
This occurs in TWO ways:
1) The guardian can give informed consent after the minor has entered into the contract, from THIS moment, the minor is bound by the contract. The ratification acts retroactively and the contract is deemed to have been fully binding on the minor from the date on which the contract was signed.
2) Minors can also ratify their contract once they attain majority, again the retrospective effect. Former minors can ratify their contract expressly by EXPLICITLY confirming that they wish to be bound by the contract.
Former minors can also ratify their own contract by implication. ie If they try to force the other party to perform their side of the bargain.
Former minors can also ratify their own contract by other kinds of conduct.
What happens if former minors don't know they can repudiate the contracts?
Former minors cannot be held to HAVE ratified their contract by failing to repudiate it after attaining majority if they were unaware of their right to repudiate the contract, provided that their ignorance was reasonble and excusable.
Former minors can repudiate their contract after attaining majority, provided that they do so within a reasonable amount of time.
THE EFFECT OF AGE ON STATUS:
Age is the most significant factor affecting status.
A person's legal status depends on his/her membership with of a particular group/class of people. This is decided by the legal system.
TWO AGE GROUPS EFFECTING DIFFERENTIATED LEGAL STATUS:
1) Children from birth until the age of 7 are classified as infants (
in singular and
in plural). This is a rule in common law as inherited from the romans.
2) Children under the age of 18 are classified as minors and is based on a status found in roman law. Section 17 of the Children's Act establishes 18 as the age of majority and came into operation as of July 2007.
Before July 2007 the age of majority in SA was 21.
CAPACITY TO PERFORM JURISTIC ACTS:
These are voluntary human acts which have intended legal consequences. This is an act through which a person actively changes his/her legal position by doing things to acquire rights/ incur legal obligations.
These are regarded as expressions of will on the part of the person performing the acts where the person concerned actively intends certain legal consequences to result from his/her acts.
For this reason,the law ONLY recognises CAPACITY to perform juristic acts if the person is CAPABLE of understanding the legal nature and legal consequences of their acts.
There is IRREBUTTABLE PRESUMPTION that infants can never understand the legal nature and legal consequences of their acts.
Infants have NO capacity to perform juristic acts and any acts which they purport to perform will be void and of no legal effect.
Minors of seven years/older are treated differently. There is NO presumption that they can never understand the legal consequences and nature of their acts.
The law still limits the capacities of minors to perform juristic acts to protect them against their immaturity of judgment.
The general rule is that minors cannot worsen their legal position (by acquiring duties or giving up rights) unless they have the assistance/guidance of their guardians.
They can usually improve their legal position (by acquiring rights/terminating legal obligations) without assistance.
No capacity to perform any juristic acts.
Thus no capacity to conclude contracts.
If an infant purports to conclude a contract, the contract will be void and of no legal effect.
There is no contract and parties must be restored to the same position that they were in before the purported contract was concluded.
This does NOT mean that infantes can never acquire rights and duties in terms of contract.
They can if their guardian concludes a contract on their behalf, thus the infant acquires the rights and duties and NOT the guardian.
It is NOT enough for the guardian to assist the infant, the guardian must act on the infants behalf.
The infants' lack of contractual capacity extends EVEN to contracts through which they acquire ONLY rights and NO obligations ie donations. The infant does not have the capacity to accept the donation-The guardian must accept the donation in the infants behalf.
Infants cannot incur any form of contractual liability UNLESS their guardian contracts on their behalf.
Infants CAN incur liability on the basis of unjustified enrichment even when they act on their own behalf.
Because this form of liability arises by automatic operation of law and does NOT depend on whether or not the person is able to understand the legal nature of their acts.
MINORS SEVEN YEAR + :
Limited capacity to enter contracts.
Can validly conclude contracts without assistance if the contract confers rights and imposes NO obligations ie contracts of donation or contracts which release them form debt.
Limitations to act exist to protect them from inexperience.
Minors do NOT need protection when accepting gifts PROVIDED there are no reciprocal obligations placed on the minors concerned.
Unassisted minors CANNOT incur binding contractual obligations.
Assisted minors incur binding contractual obligations in the same way as majors.
EVERYTHING CHANGES WHEN A CONTRACT PLACES OBLIGATIONS ON A MINOR
THE GUARDIANS ASSISTANCE:
This changes everything.
Assisted minors incur full contractual liability - Unassisted minors incur none at all.
If bound by contract the court can order specific performances which force everything that agreed to do.
If in beach of a binding contract damages can be awarded by the court.
These can be extensive : They are aimed at putting the other contracting party in the same position it would have been if the contract had been fully and faultlessly performed.
Guardians will be deemed to have assisted if they have informed consent to a contract. The guardian MUST know the MATERIAL/ESSENTIAL terms of a contract and the surrounding circumstances.
If informed consent is given then the minor is assisted.
Guardians do NOT need to know every detail of the contract to give informed consent to it.
The guardian must know the material terms of the contract.
Law is not overly particular about consent.
Does NOT matter when/form the assistance takes place nor which guardian gives consent.
Guardians can enter into contracts on behalf of the minor.
There certain agreements guardians CANNOT conclude on behalf of a minor ie Antenuptial contract.
A guardian cannot enter into a contract on behalf of a minor if the contract only comes into force after the minor becomes a major.
A guardian CAN enter into a contract on the minors behalf even if the minors obligations continue after the minor attains majority PROVIDED that the contract comes into operation DURING the period of minority.
If a contract will be beneficial to a minor, the guardian is obliged to provide the necessary assistance. If a guardian refuses to give consent/unable to do so, the court may order the guardian to to give the necessary consent OR itself consent to the contract instead of the guardian.
Guardians can revoke their consent if the transaction as set out in the contract has not yet taken place.
Minors can go off on their own and can enter into contracts with prior permission.
They can enter into contracts and then just tell their guardians about it.
Consent may be expressed ie written/signed.
Consent may be silent ie implied/tacit
ie The guardian will be deemed to have consented to the minors contact if he/she knows about it and does NOT OBJECT to it,
Law always requires informed consent no matter what form/when/which. The guardian must understand what he/she is consenting to.
The guardian will NOT be deemed to have given informed consent if he/she does NOT know the details of unusual terms, especially where these terms are onerous.
PASSIVE LEGAL CAPACITY:
The capacity to merely have legal rights and duties. All people have passive legal capacity and age does NOT affect this.
All these situations : The minor has been validly assisted and therefore bound if guardian gives informed consent.