Capacity

Question 1

Minors

What is the common law rule and what statures apply generally?

Answer 1

Courts seek to protect those incapable of giving a full, free and informed consent due to their age.
Age of Majority Act 1985: Anyone under 18 is a minor (unless married).
Common Law: General rule was that contract with a minor is voidable at the behest of the minor.
S.2 Infants Relief Act 1874: Certain contracts are deemed void ab initio, incl. contracts for repayment
of money lent or for goods supplied. Exceptions: (1) Necessaries (2) Beneficial Contracts of service.

Question 2

Minors - Necessaries

S.2 Sale of Goods Act 1893

Answer 2

Defines necessaries as “goods suitable to the condition of life of such minor or other person, and to his actual requirements at the time of sale and delivery”. This includes sustenance, clothes, shelter. The onus to prove the goods were necessary is on the seller.
Test: (i) Goods must be suitable to the condition in life of the M & (ii) to their actual requirements

Question 3

Minors - Necessaries - SGA - Suitable to the condition in life of the minor

Skrine v Gordon [1875]

Answer 3

G pretended to be a member of the Surrey stag hunt. Agreed to buy hunting horse for £600. Failed to
pay. S sued. Held a hunting horse is not a necessary: luxuries and amusement not necessaries.

Question 4

Minors - Necessaries - SGA - Suitable to Actual Requirements

Nash v Inman [1908] Leading

Answer 4

Oxford student who was a minor (under 21) bought 11 waistcoats from a tailor. Despite being deemed necessaries, held not necessary in the circumstances.
I’s dad demonstrated his son was adequately equipped with clothes

Question 5

Minors - Necessaries - SGA - Suitable to Actual Requirements

Propoketz v Richardsons Marina [1979]:

Answer 5

A motor boat is not a necessary.

Question 6

Minors - Necessaries - SGA - Suitable to Actual Requirements

LRC Report 1985

Answer 6

Encyclopaedia for infant TV researcher is a necessary, but not if for a thirst of knowledge only

Question 7

Minors - Necessaries - SGA - Suitable to Actual Requirements

First Charter Bank v Musclow [1974]

Answer 7

A vehicle for work or domestic purposes would be a necessary.

Question 8

Minors - Necessaries - SGA - Suitable to Actual Requirements

Helps v Clayton [1864]:

Answer 8

Legal advice for a minor may be a necessary.

Question 9

Minors - Necessaries - SGA - Suitable to Actual Requirements

S.2 SGA 1893:

Answer 9

If goods are deemed necessary, a minor must pay a reasonable price for them.

Question 10

Minors - Beneficial Contracts of Service

Definition in De Francesco v Barnum [1890]:

Answer 10

Defined as a contract for the minor’s good teaching or instruction
whereby he may profit himself afterwards. Mainly contracts of employment or apprenticeship

Question 11

Minors - Beneficial Contracts of Service

General rule and applicable statute?

Answer 11

While the Protection of Young People in Employment Acts 1977-1996 regulates this area somewhat, common law protections exist: Voidable unless the contract is more to his benefit than disadvantage.

Question 12

Minors - Beneficial Contracts of Service

De Francesco v Barnum [1890]

Answer 12

14 y/o entered into contract to be taught how to dance on stage. Harsh terms: teacher not obliged to pay her unless he got shows for her (still paid v little), couldn’t perform w/o his consent, could be sent abroad at his whim and not allowed get married without his consent.
Held this was unenforceable as it was clearly not to her benefit.

Question 13

Minors - Beneficial Contracts of Service

Shears v Mendeloff [1914]

Answer 13

Contract between boxer and manager held voidable as it was to the benefit of the manager only.
B had to pay expenses, manager entitled to ¼ of winnings despite no obligation to get fights for B

Question 14

Minors - Beneficial Contracts of Service

Proform Sports Management Ltd v Proactive Sports Management Ltd [2007]

Answer 14

Rooney entered into representation agreement with P when he was 15. Ended it and entered into agreement with D. P claimed D committed the tort of interference with contractual relations.
Held the agreement bw P and R not a beneficial contract of service: simply one of representation
It didn’t involve training nor did it attempt to find R work (already signed w Everton FC at time)
Agreement was voidable at R’s behest and therefore P’s claim against D failed.

Question 15

Minors - Beneficial Contracts of Service

Doyle v White City Stadium [1935]

Answer 15

If M receives some sort of tuition or its incidental to how he earns a living, it may be enforceable:
Held agreement was overall to the benefit of the boxer despite inclusion of clause that allowed his purse to be forfeited where he breach the rules of the British Boxing Board.
Lost challenge to decision to forfeit his purse where he was disqualified for an illegal punch.

Question 16

Minors - Beneficial Contracts of Service

Chaplin v Leslie Frewin (Publishers) Ltd [1966]

Answer 16

Charlie C’s son entered into agreement to sell his memoirs but then tried to have the contract declared unenforceable as a contract of service not to his benefit as it was potentially libellous.
Held a CS but held advantages far outweighed the negatives: allowed him make start as an author

Question 17

Minors - Other Voidable Contracts

Stapleton v Prudential Assurance [1928]:

Answer 17

Contracts requiring a M to make periodic payments are voidable at the behest of the minor, but if he’s started making payments in accordance with the contract, monies already paid are not recoverable.
Contract of insurance held voidable at behest of minor

Question 18

Minors - LRC Reform

What did the LRC recomend?

Answer 18

Recommended allowing qualified enforceability with minors: imposes some contractual liability on minors but would only occur where it was considered fair to do so.
Recommended a general principle of restitution where a contract made by a minor with an adult
would be enforceable by the minor against the adult, but not by the adult against the minor.

Question 19

Convicts

What is the rule?

Answer 19

Previously incapable under Forfeiture Act 1870, but Criminal Law Act 1997 repealed
this so in theory they are capable if prison authorities let him conduct such transactions from cell

Question 20

Mental Incapacity

General rule?

Answer 20

Generally considered valid unless (a) nature of the illness prevented the person from knowing what he was doing and (b) the other party was aware of this mental illness.

Question 21

Mental Incapacity

Bourke v O’Donnell and Bank of Ireland [2010]

Answer 21

77 y/o widow in nursing home with mental illness. Lucid at times, but had bouts of disorientation.
B discharged from home by O who were her close friends. They brought her to the bank where she tried to withdraw over €100k. Bank manager advised her to seek independent legal advice.
B claimed she’d no fam and wanted to give it to O as gift. Allowed to withdraw money.
B later claimed she’d no memory of the event and didn’t intend to give them any money
She claimed she lacked the mental capacity and the bank was aware or should’ve been aware.
Held she lacked the mental capacity to enter and the bank should’ve prevented the withdrawal in
the circumstances: manager didn’t make any real enquiry re her capacity, just her intentions

Question 22

Companies

What’s the rule?

Answer 22

Limited in ability to enter into contracts by the memo and articles of assoc (now the constitution). If the company acts outside this, the action will be considered null and void.

Question 23

Intoxication

White v McCooey [1976]

Answer 23

Party must have been so intoxicated they did not know the nature of their actions, and the other party must have known of this intoxication. Important he repudiates as soon as sober again

Question 24

Intoxication

S.2 SGA 1893:

Answer 24

Contracts for necessaries will be binding but only a reasonable price required