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Capacity (Minors Only) - Coggle Diagram
Capacity (Minors Only)
parties to a contract must have the ability to contract. some people do not have the ability to contract and make binding decisions
legislation exists to protect minors (under age of 18) and people with mental difficulties from being exploited
people may be temporarily incapacitated through alcohol or drugs
contracts entered into with such people arennt normally binding
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Necessaries
law states:
- minors should be allowed to enter into contracts
- minors should pay for goods and services which are supplied to them and which are classed as necessaries according to their station in life and current needs
this rule allows minors to enter contracts which are advantageous but prevents unscrupulous businesses taking advantage
necessary in the context is a very specific meaning & doesnt have same meaning as necessity
what is necessary depends on minors background - what is necessary for a prince may not be the same for another child
s3 of the sale of goods act 1979 states 'where necessaries are sold and delivered to a minor, or to a person who by reason of mental capacity or drunkenness' is incompetent to contract must pay a reasonable price for them thus'
shows that for a valid and enforceable contract to exist the goods actually have to be supplied and minor is only obliged to pay a reasonable price
chapple v cooper:
minor whose husband had recently died instructed undertakers whom she subsequently refused to pay claiming incapacity
undertakes successfully sued as funeral was private benefit & deemed necessary as she was under obligation to bury her husband
nash v inman:
minor was supplied goods of £122 by savile row tailer including 11 gold braided waistcoats - while the court accepted that this clothing might be appropriate and necessary to inmans station of life, the contract was unenforceable as he already owned enough clothes
Beneficial contracts of service
education, training & unemployment
Minors must be able to support themselves financially, and thus need the capacity to enter into contracts of employment
however, the terms of the contract need to substantially benefit the minor
this can be seen in clements v london and north western railway but this case can be comapred with de francesco v barnum
clements v london and north western railway company 1894:
a minor was bound by the employers scheme as it was beneficial too him
de francesco v barnum; minor was not bound under terms of her apprenticeship
the courts have become progressively more lenient as to what might be binding on a minor - doyle v white city stadium 1935: contract was binding as it encouraged the minor to be clean and proficient which was to his advantage
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Remedies against minors:
general rule is that minors arent bound by contracts into which they have entered and do not incur liability
liability can be incurred if they ratify the contract
where the contract has been performed by the minor they will be unable to recover the benefits they have conferred on the other party
Minors Contract Act 1987:
act states that a contract made by a minor is unenforceable and cannot be binding - has following implications:
- even though the minor may not be bound by the contract, the other party will be
- if the minor has already padi money under the contract, they may be able to recover it if no consideration has been made to them
- when the minor reaches 18 they can confirm the contract if they so wish
- ratification can be implied just by the minor continuing with the contract
guarantees
s2 of the act provides that where there is a guarantor to the contract, their ability will not be avoided due to their guarantee being a minor
in equity:
s3 of the act provides that where it is just and equitable to do so the court may require the minor to transfer any property acquired by the minor under the contract back to the original owner
Limits:
definition of necessaries is very wide and under s3(3) of the sales goods act 1979 they are considered to be goods suitable to the condition in life of the minor - wide definition has been adopted in common law
a minor is bound in contract of employment if that contract is generally for their benefit
certain contracts are voidable rather than void and thus the contract will be valid and binding until the minor repudiates - if they perform their side of the contract it is unlikely that a voidable contract can be made void
contract with a minor is effective to pass property to the minor - under s3(1) of the minors contracts act 1987 it is also effective to pass properly from a minor