There are certain categories of people who is the opinion of the law do not have full capacity to enter into contractual relations
• Contractual capacity of minors- the common law age of majority for the purpose of contractual liability is 21 years. 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. Where a minor enters into a contract for the purchase of necessaries, such a contract is binding on the minor and he is liable to pay reasonable price for the goods. Necessaries refers generally to those things without which a person cannot reasonably exist including food, clothing, lodging, education, training in a trade and other essential services such as medical service. It also refers to good suitable to the condition in life of the person to whom they are delivered and to his actual requirements at the time of delivery.
CHAPPLE V COOPER,A young widow was sued successfully for the funeral expenses for her late husband, as these services were regarded as necessaries.
NASH V INMAN, A tailor (N) supplied 11 fancy waist coats to a Cambridge undergraduate. Held- these were not necessaries because the minor had already had sufficient quantity (provided by his farther) therefore the minor need not pay for them.
No contract is binding on a minor if it prejudicial his interest, even if it would otherwise be valid. This is so even when the goods or services qualify as necessaries.
FAWCETT V SMETHURST. The infant entered into a contract under which he hired a car for the transport of his luggage. The contract stipulated that the infant would be absolutely liable for any damage to the car whether by his negligence or not. Held- the contract was not enforceable against the infant because the terms were harsh and onerous.
The second category of contracts which are generally binding on infants are beneficial contracts of service or apprenticeship contracts. These contracts are 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, A porter joined an insurance scheme and as a result gave up his statutory rights as an employee. Held- despite the benefit that was given up he received greater benefit from the employer as a whole therefore enforceable.
FRANCESCO V BARNUM. A girl of fourteen was apprenticed to D for seven years in order to learn to dance. D was not obliged to maintain her, nor did he have to pay her unless he found engagements for her. Even when engagements were found, the rate of pay was very low. She could not obtain engagements for herself, nor was she allowed to marry, during the seven years. It was held that the contract was not binding upon the girl, as it was unreasonable, oppressive and not beneficial to her.
This principle has been applied to contracts which allow the minor to earn a living through the exercise of a professional occupation.
DOYLE V WHITE CITY STADIUM LTD
A minor’s contract was subject to the rules of the British Boxing Board of Control. He was disqualified for hitting below the belt and lost his purse. Held- whilst one clause was disadvantageous, it was still enforceable as on the whole the contract was beneficial due to the training received
The principle does not extend to trading contracts. Trading contracts entered into by minor do not qualify as necessaries and are therefore, not enforceable against him, no matter how beneficial the terms may be to him.
COWERN V NIELD, A minor who was a hay and straw merchant was not liable to repay the price of the goods which he failed to deliver because the infant was not liable for trading contracts.
MERCANTILE UNION GUARANTEE CORP LTD V BALL, An infant haulage contractor who took a lorry on hire-purchase was held not liable for arrears of installments.
The third category of contracts binding on the minor are voidable contracts. They are binding on the minor unless and until he repudiates the contract during his minority or within a reasonable time after attaining majority. Voidable contracts are contracts by which the minor acquires an interest in some subject matter of a permanent nature, which gives rise to continuous and recurrent obligations. In Ghana they include lease contracts, contracts affecting land, contracts for the acquisition of shares and marriage settlement. Where the contract is repudiated he is not ordinarily entitled to avoid liability for obligations, which have already risen under the contract. He is not entitled upon repudiation to claim money or property transferred to the other party under such a contract, unless he can establish complete failure of consideration.
STEINBERG V SCALA. The infant plaintiff applied for shares in the defendant company and paid the amounts due on application and allotment. No dividend was paid on the shares, which were only Half-paid up and at one time had a marketable value. Eighteen months later, being unable to pay calls as they were made, the plaintiff repudiated the contract and claimed the return of the money she had paid in respect of the shares. Held- as a minor the plaintiff can repudiate the contract between her and the company. She can also get the register rectified and her name struck out. However she could not recover the monies paid on the shares because she received consideration which were the shares. She was in the position to sell or transfer her shares.
Minor’s liability in loan contracts
Generally, a person who lends money to a minor cannot recover it at common law, but can, in equity recover that part of the loan which was actually used by the minor to purchase necessaries.
Minor’s liability in torts
Minors are liable for their torts. However, where the cause of action arises directly out of a contract which is not binding on the minor, the minor would not be liable for the tort.
FAWCET V SMETHURST. The infant entered into a contract under which he hired a car for the transport of his luggage. The contract stipulated that the infant would be absolutely liable for any damage to the car whether by his negligence or not. Held- the minor was not liable in tort either because to so would be an indirect way of enforcing an otherwise unenforceable contract.
This rule only applied where the breach in question consists of doing an act which is not contemplated by the contract. In such a case, the cause of action in tort is deemed to be separate and independent of the contract.
BALLET V MINGAY. The defendant a minor hired a microphone and amplifier which he improperly parted with a friend and did not return it back to the plaintiff. Held- since the terms of the bailment contract did not permit him to part with the possession of the article at all, the minor’s actions fell outside of the scope of contract altogether and he was therefore liable for the tort of detinue.
Fraudulent misrepresentation of age by infant
Where a minor fraudulently misrepresents his age and thereby induces another person to enter into a contract which is ordinarily unenforceable against the minor, the contract remains unenforceable against the minor despite his fraud and the minor will not be liable for the tort of deceit wither because the cause of action in tort arises directly out of the contract which is not binding on the minor. LESLIE LTD V SHEILL. Equity however in certain circumstances intervenes in order to prevent the minor from benefiting from his own fraud. Where a minor obtains property by means of fraudulent misrepresentation of his age, he could be compelled to restore that property to the person deceived provided that the property is identifiable and still in the possession of the minor. This is known as the doctrine of equitable restitution. The rule is that restitution stops where repayment begins. If he has sold the goods or used or spent the money, he cannot be compelled to refund an equivalent sum from his own resources.
Minor’s right to enforce contract against adult party
A minor has no capacity to institute an action directly or by himself. He can defend an action only through a guardian ad litem. Generally, a minor cannot obtain an action of specific performance against an adult party because the remedy is normally not available against the minor. However where the minor has fully performed his obligations under the contract such that there is nothing that the other party can possibly ask a court to specifically decree, the remedy would be available to the minor party.
LARTEY V BANNERMAN. The def, a lessee contracted to sell his property to BL. BL informed the def that he was buying the property for his daughter-the infant plf. After BL had, in pursuance of the contract, paid part of the purchase price and given the balance to his solicitor to be given to the def when he executed the deed of assignment, the solicitor refused to execute the deed of assignment. Consequently, BL brought an action in his own name inter alia, specific performance against the def. while given evidence, however BL testified that his daughter as a minor. He was therefore cross examined about his authority to commence and maintain the action. The writ was subsequently amended to indicate that plaintiff was suing by BL, her next friend. The defense purported to have been made with an infant. Held- the basis of the rule disappeared where the infant came before the court requesting the decree after he had performed his side of the bargain, because there was nothing that the other party might possibly ask a court specifically to decree. The remedy of specific performance should be made available to the plaintiff to compel the def to perform his part of the contract.
• Contractual capacity of mentally incompetent persons– unsoundness of mind would be a good defense to an action upon a contract if it could be shown that the def was not of a capacity to contract and the plf knew it- IMPERIAL LOAN CO V STONE. If it is shown that the mentally incompetent person was incapable of understanding the nature and effect of the contract he has entered into, the contract is voidable at the instance of the mentally incompetent party only if he can prove that the other party knew or ought to have known of his mental disability at the time of contracting. The burden of proof have been held to lie on the mentally incapacitated party. However, a mentally incompetent person will be deemed to be bound by a contract made by him during a lucid interval even if his disability is not known to the other party. A mentally incompetent person is liable to pay for necessaries supplied to him, where the supplier expected that the goods would not be paid for, whether or not the supplier was aware of his disability.
• Contractual capacity of drunken or intoxicated persons– if at the time of the contract, a person was too drunk or intoxicated as not to know the consequences of his act and his drunkenness was known to the party at the time of contracting, the contract made will be deemed to be voidable at the instance of the drunken party. The drunken party however has the option of ratifying the contract when he becomes sober so as to make the contract valid.
MATTHEWS V BAXTER. The parties has agreed for the plaintiff to buy a house form thief. The plaintiff was so drunk that he did not know what he was doing. When he was sober, he ratified and continues the contract. The contract was held to be a binding one.
A drunken person in a contract for necessaries is under the same obligation as an insane person to pay a reasonable sum for the goods supplied.