CONTRACT LAW - Consideration, ICLR & Capacity - CAPACITY Flashcards
Does a contract bind a person who lacks capacity to enter into a contract? (1)
Unlikely.
Who has contractual capacity? (3)
Persons over age of 18, of sound mind and not suffering from a factor ruling out capacity such as drunkenness.
Can minors be bound by contract? (2)
No but there are two main exceptions:
1. Necessaries
2. Contracts of employments / apprenticeships / education.
What does the Sale of Goods Act 1979 state regarding necessaries? (1)
‘Necessaries’ means goods suitable to the condition in life of the minor or other person concerned to their actual requirements at the time of the sale and delivery.
What does the case of NASH V INMSAN 1908 demonstrate? (2)
11 waistcoats supplied to a minor who was an undergraduate at Cambridge University at the time were suitable according to the minor’s station in life but not necessary as he already had sufficient clothing.
The contract was not enforceable.
What does the case of AYLESBURY FOOTBALL CLUB V WATFORD ASSOCIATION FOOTBALL CLUB 2000 demonstrate? (3)
A young footballer’s contract with the club was not beneficial and could not be enforced because the player received no extra training or experience.
The terms restricted his freedom to pursue a football career.
The payment of wages depended on the will of his employer.
What happens if a minor ratifies a contract once they reach 18? (1)
They will be bound by it.
What does S2 of the Mental Capacity Act 2005 state? (1)
‘Is unable to make a decision for himself in relation to the matter.’
What does S7 of the Mental Capacity Act 2005 state? (1)
A person without capacity still remains liable to pay a reasonable price for ‘necessaries.’
What happens in other cases of incapacity? (3)
The position is that the contract is binding unless the person claiming incapacity can establish first that they did not understand what they were doing and, secondly that the other party knew that to be the case.
