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Minors in contracts
05/12/2006 The Star By BHAG SINGH
IN today’s world, much dependence is placed on other people to fulfil
personal needs which – in earlier times – were often personally attended to.
As such, often without being fully aware and conscious, many a person enters
into a contract which not only gives rise to legal rights but also creates
obligations which must be honoured.
Whilst little difficulty arises in these matters, so far as adults are
concerned, an increasing number of such transactions are being entered into,
by children. And it has often been said that contracts involving a child may
not be valid.
Does this therefore mean that children can enter into a contract and yet get
away from their obligations when the time to fulfil them arises? The
situation is not as simple as that.
The law is found in the Contracts Act 1950 which provides that an agreement
is a contract if made by the free consent of parties competent to contract,
for a lawful consideration and with a lawful object.
Here the age factor comes in through section 11 which provides that “Every
person is competent to contract who is of the age of majority according to
the law to which he is subject ....”
In the context of our discussion therefore, what is relevant is that the
person is of the age of majority which in our case, is 18 years. Therefore,
if the child is not of the age of 18 years, such a person is not competent
and on general principles, the contract would not be enforceable.
This is a common law principle based on the need to protect the young who
are perceived to be vulnerable and therefore require extra protection. And
for the purposes of deciding who should be protected the age of majority is
adopted as the dividing line.
However, it is not always that such a person can avoid liability on a
contract that he has entered into. An exception is a contract for
necessaries, which will be binding even on a person who has not reached the
age of majority.
The philosophy behind this is that in the case of necessaries – be they
goods or services – there is no disadvantage or detriment to the minor. Of
course, it is not everything that comes within this exception. However, more
than a mere benefit is required. As was said in Cowern v Nield by Phillimore
J.
“It is no doubt correct to say, in a general sense that contracts of a
certain character are enforceable against an infant if they are for his
benefit, but an infant is not necessarily liable on a contract merely
because it is for his benefit... the only contracts which, if for the
infant’s benefit, are enforceable against him are contracts relating to the
infant’s person, such as contracts for necessaries, food, clothing, and
lodging, contracts of marriage, and contracts of apprenticeship and service.
In my opinion, a trading contract does not come within that category”.
The subject of what are necessaries is a topic that needs to be discussed by
itself. And in our Contracts Act 1950, this aspect of the subject is
contained in section 69:
“If a person, incapable of entering into a contract, or anyone whom he is
legally bound to support, is supplied by another person with necessaries
suited to his condition in life, the person who has furnished such supplies
is entitled to be reimbursed from the property of such incapable person”.
If the steps taken to enforce the obligations of the person who has not
attained the age of majority, are taken when such a person is still a minor,
the situation would be simpler. However, there are cases where the
performance of the contract – though entered into with a minor – continues
beyond such a person’s minority. Then, there is continuing obligation and
this requires a repudiation or rectification depending on the circumstances.
One example in the past was scholarships, when recipients took the
opportunity to say that they were minors at the time they signed the
scholarship agreement, and that therefore the contract lacked validity; on
account of their lack of competency on the basis of not being of full age.
The contrary argument that had to be put forward was that the scholarship
amounted to what could be called necessaries. Where the recipient had
reached the age of majority and continued to receive the scholarship, there
would be the further argument that the agreement had been ratified and
adopted by the recipient.
All this led to some uncertainty as to how recipients of scholarships –
especially from the government and statutory bodies – and others could be
bound, notwithstanding that some of them were not of the age of majority by
the enactment of the Contracts (Amendment) Act, 1976.
The amendment covers scholarships governed by the Federal Government or a
State Government, a statutory authority, or an approved educational
institution and provide that “no scholarship agreement shall be invalidated
on the ground that the scholar entering into such agreement is not of the
age of majority”.
This, of course, helped eliminate and put to rest any such arguments based
on the competency of the recipient, based on the fact that such a person had
not reached the age of 18.
Otherwise, of course, basic principles of law continue to provide that a
person who has not reached the age of 18 years is not competent to contract;
therefore, contracts entered into with such a person would not generally be
enforceable.
The principle has no doubt been the subject of criticism by writers and
drawing a line at 18 years viewed as being arbitrary. In the book The Law of
Contract, Greig and Davis say: “It is however, a misnomer to talk in this
context of a lack of capacity. A minor, for instance, is fully capable of
entering into a variety of contracts.”
Another writer says that the arbitrary notion that individuals below the age
of 18 require protection from certain bargains seems out of step with modern
psychology and the economic realities of life. Of course, the law remains
grounded on the old common-law principles. |
