Capacity Flashcards
What is the general rule in relation to contracts entered into by minors?
Minors are not bound by contracts and cannot be sued under them.
The other party to the contract is bound however and can be sued.
What is the exception to the rule that minors cannot be bound by contracts?
Contracts for necessities bind minors.
Necessities incude the supply of necessary goods and services (eg food) as well as contracts for the benefit of the minor.
Define necessities under the SGA 1979.
Goods which are suitable to the condition in life of the minor and his actual requirements at the time of sale and delivery.
Necessities therefore extend beyond mere absolute essentials (eg food and clothes).
what is necessary in relation to a minor depends on their individual circumstances and their actual requirements at the time of purchase.
Would the sale of an expensive school blazer to a 16 year old be a contract for a necessity?
Potentially, but this would depend on whether the minor had an adequate supply of blazers of similar properties.
What is the rule in relation to minor’s entering into contracts for services?
they will be binding if they are beneficial to the minor.
Generally this will refer to contracts of employment under which a minor gains training, experience and a wage (provided that on balance the contract is more favourable than not to the minor).
Explain whether contracts entered into by someone who is suffering mental incapacity are binding.
Contracts with someone suffering from a mental illness, impairment swell as intoxication may be avoidable.
To be voidable, the person making the contract must have been incapable of understanding the nature of the transaction AND the other party must have known this was the case. In these circumstances the contract will continue to be binding unless the party suffering from the mental impairment or inebriation terminates it.
When is a contract entered into by a statutory corporation (eg local council) void?
If they have acted ultra vires.
