Capacity To Contract Flashcards
What is the minimum age for infant to enter into a contract in Ghana?
a natural person not above 21 years. -Section 32, Interpretation Act, 1960. This is only within the content of contract law.
Who is an infant according to the law?
Child means a person below the age of 18 years. -Article 28 of Constitution 1992.
There is however, currently no statutory provision which stipulates 18 years as the age of majority for purposes of contractual liability
What is the general rule concerning infants and their capacity to contract ?
At common law contracts entered into between a minor and an adult are not binding on the minor but are binding on the adult party.
What are necessaries ?
ection 2(3) of the Sale of Goods Act of Ghana, 1962 (Act 137) defines it thus: “necessaries are goods suitable to the condition in life of the person to whom they are delivered and to his actual requirements at the time of the delivery
What is contract for necessaries and what is its take on the general rule ?
Section 2(3) of the Sale of Goods Act of Ghana, 1962 (Act 137) defines it thus: “necessaries are goods suitable to the condition in life of the person to whom they are delivered and to his actual requirements at the time of the delivery
How is the case of Chapple v. Cooper relevant to capacity of contract of minors with relation to necessaries
Anne Cooper was a minor (under the age of 21 at the time) and a widow.
Her husband had recently passed away and left no estate to be administered.
She contracted with an undertaker, Mr. Chapple, for the provision of her husband’s funeral services.
Mr. Chapple sued Ms. Cooper to recover the costs of the funeral.
Ms. Cooper argued that she was not liable as she was a minor. The court reasoned that funeral services for her deceased husband were considered “necessaries” suitable to her condition in life as a widow and were a personal benefit to her by allowing her to fulfill her duty to bury her husband decently.
* The court established the principle that minors are liable to pay a reasonable price for necessary goods and services supplied to them.
How is the case of Nash v Inman relevant to capacity to contract of minors ?
Mr. Nash, a tailor based in Savile Row, sued Mr. Inman, a minor who was an undergraduate at Cambridge University.
* Nash had supplied Inman with various clothing items, including 11 fancy waistcoats, to the value of £145 7s 6d (a significant sum at the time). The goods were supplied on credit.
* Inman refused to pay for the clothes, pleading infancy as a defense.
Nash v Inman is a crucial case that refined the definition of “necessaries” in the context of minors’ contracts.
* It highlighted that simply providing goods suitable to a minor’s social standing is not enough; the supplier must also prove that the goods met the minor’s actual needs at the time.
What is beneficiaries contract for minors’ take on the general rule?
where an infant enters into a contract of apprenticeship or a contract of service under which he receives instruction or training, the contract is binding on the infant, provided that the terms of the contract, construed as a whole, are substantially to the benefit of the infant.
Clements v. London & Northwestern Railway. How is this case related to the beneficiary contract oc service?
Clements was a minor who was employed by the London & North Western Railway Company as a porter.
* As part of his employment contract, Clements agreed to join the company’s insurance society. This scheme provided benefits to employees in case of accidents, and in return, the employees (including Clements) agreed to waive their rights to claim against the company under the Employers’ Liability Act 1880.
* Clements sustained an injury during his employment and subsequently tried to sue the railway company for compensation under the Employers’ Liability Act.
* The railway company argued that Clements was bound by his agreement to join the insurance society and thus had waived his right to sue them directly.
His argument in court was essentially that, as a minor, he shouldn’t be bound by the part of his employment contract where he agreed to waive his rights under the Act in exchange for joining the company’s insurance. He was hoping to have that waiver deemed invalid due to his age, allowing him to sue the railway company directly for potentially higher compensation under the statute.
However, the court’s decision went against him.
Who is the case of De Francesca relevant to capacity to contract ?
A young girl (the minor) entered into an apprenticeship deed with De Francesco for a period of seven years to be taught stage dancing.
* The contract contained several clauses that were heavily weighted in favor of De Francesco:
* The minor agreed to serve De Francesco exclusively for seven years and could not take any other professional engagements without his written consent.
* The minor could not marry during the term of the apprenticeship without De Francesco’s consent.
* De Francesco had the power to terminate the contract if he deemed the minor unfit for stage dancing.
* There was no reciprocal obligation on De Francesco to provide the minor with work or maintenance.
* The minor eventually left De Francesco and entered into an engagement with Barnum. De Francesco sued Barnum for inducing a breach of contract.
Doyle v. White City Stadium Limited. What is its relevance
What is a viodable contract and what is its exception to the general rule
Contracts within this category are described as voidable because they are binding on the minor unless and until he repudiates the contract during his minority or within a reasonable time after attaining majority
Which contracts are considered voidable in contract law
lease contracts, contracts affecting land or immovable property, contracts for the acquisition of shares in a company and marriage settlements.
London and northwestern Railway Company v Michael. What is its relevance to the topic ?
M’Michael, while a minor, had become a shareholder in the London & North Western Railway Company and had held shares for some time.
* The company sought to recover calls (payments demanded from shareholders) that had become due on his shares.
* M’Michael pleaded infancy as a defense, arguing that he was not bound by the contract to take and pay for the shares. held that M’Michael was liable to pay the calls that had accrued while he was a shareholder.
Minor’s Liability in Loan Contracts. What is the rule for this in reference to minors?
Generally, a person who lends money to an infant cannot recover it at law. With the exception of student loan schemes
Minor’s Right to Enforce Contract Against Adult Party. What is the rule on this ?
An infant cannot bring an action for specific performance against an adult party unless he has completely performed his side of the bargain such that there will be nothing the other party the other party might possibly ask the court to specifically enforce
Can an infant bring an action directly against the adult or vice versa?
An infant cannot bring an action directly or by himself before the courts.
●He must:
▪ sue by a next friend represented by a lawyer, or
▪ Be sued through guardian ad litem
-Order 5, High Court (Civil Procedure) Rules, 2004.
Minor’s Liability in Torts
Who is lunatic or a mentally incapacitated person ?
●A lunatic is
- a person of unsound mind,
- a mentally incompetent person,
- an insane person
- or one who is not compos mentis
What secures the defence for insanity in capacity to contract ?
Unsound mind i.e. that at the time of contracting he was incapable of understanding the nature if the contract due to his mental disability
ii. Knowledge of the fact by the other contracting party i.e. that the party knew or ought to have known. -Imperial Loan v Stone.
How was the twin test used in the case of Stone v Imperial loan?
- Stone was sued by the Imperial Loan Company Ltd for money lent to him.
- Stone’s defense was that at the time of entering into the loan agreement, he was of unsound mind and incapable of understanding the nature of the contract.
- He further argued that this fact was known to the plaintiff (the loan company). Stone was held liable because he was unable to satisfy the twin test.
Does the rule on mentally incompetent people able to the supply of necessaries to the lunatic?
A mentally incompetent person is liable to pay for necessaries supplied to him, where the supplier expected that the goods would be paid for, whether or not the supplier was aware of his disability.
Does the general rule for capacity to contract apply to Drunken of Intoxicated Persons?
If at the time of contract, a person was so drunk or intoxicated as not to know the consequences of his act and his drunkenness or intoxication was known to the other party at the time of contracting, the contract made will be deemed to be voidable at the instance of the drunken or intoxicated party.
Examine hiw the case of Matthews v Baxter highlight the principle in the case of drunken persons ?
Baxter, while drunk, attended an auction and successfully bid for and agreed to purchase certain properties from Matthews.
* After becoming sober, Baxter ratified (confirmed) the contract he had made while intoxicated.
* Later, Baxter changed his mind and sought to repudiate (reject) the contract, arguing that he lacked the capacity to enter into it due to his drunkenness at the time of the auction.
The court ruled in favour of Matthews.
-Re Rhodes. What is the relevance of this case to intoxicated persons?
Rhodes was a person of unsound mind (a lunatic).
* A grocer had supplied Rhodes with goods considered “necessaries” suitable to his condition.
* Rhodes was later found lunatic by inquisition, and a committee (a legal guardian) was appointed to manage his affairs.
* The grocer sought to recover the price of the necessaries supplied to Rhodes before he was officially declared a lunatic.
The Court of Appeal held that the grocer could recover a reasonable price for the necessaries supplied to Rhodes
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