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How does the law deal with minors who enter into a contract?
Under English Law, minors, that is, people under the age of 18, have limited capacity to make contracts. The aim of this law is to protect minors from entering into inequitable contracts and protect adults when they are dealing with minors. The basic approach of that law is to say that contracts are not enforceable against minors. The approach to the definition of necessaries in English Law consists of two elements, one objective, and the other subjective. The objective element more focus on what has been supplied comes into the general category of something which is necessaries such as food, clothing, lodging and education; necessaries are the things that an individual cannot live without. On the other hand, the subjective element is more based on the particular thing supplied is appropriate to the particular minor who received it. The other perception is contracts for necessary goods and services and beneficial contracts of employment.
The first major exception to the general rule of unenforceability relates to contracts for necessaries, which are binding on a minor to the extent that the minor must pay a reasonable price for necessaries sold and delivered to him. Section 3 of the Sale of Goods Act 1979 similarly states that "necessary goods are those suitable to the condition in life of the minor... and his actual requirements at the time of sale and delivery" (Richard, 2003). In addition, the Sale of Goods Act 1979 also provides that 'where necessaries are sold and delivered to a minor or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay reasonable price for them'. Obviously, luxury goods are excluded. According to Keenan (1995), that expensive but useful item may be necessaries provided they are appropriate to social background and financial circumstances of the minor. If the minor is already adequately supplied, the goods will not categorize as necessaries. According to Abbott, Pendlebury and Wardman (2002), "the term of necessaries is not confined to goods but also includes necessary goods and the minor is only bound to pay a reasonable price, and not the actual price of the contract" and it was clarified in some detail in Roberts v Gray (1913) which brings attention to trading contracts of minors are not enforceable, no matter how beneficial they may be to the minor's business or trade. As stated above, food and cloth are obviously covered, but medical assistance and education also fall into this category (Richard, 2003)The theory beyond this rule is what when a minor is in trade his capital is at risk and he might lose it, whereas in a contract of service there is no likelihood of capital lost (Keenan, 1997). In Robert's case, the defendant was an aspiring billiards player and entered into an agreement with the plaintiff, a leading professional, to go on a joint tour. According to Richard (2003), the plaintiff went to some trouble in order to recognize but a dispute arose between the parties and defendant refused to go. Therefore, the plaintiff sued for £6000 for damages. The court of Appeal had no difficulty in regarding this as a quasi-educational contract, and therefore within the scope of a contract for necessaries which is the contract was for the minor's benefit, being in effect for his instruction as a billiards player. Thus, the plaintiff could sustain an action for damages for breach of contract, and the court allowed recovery of damages for what was largely still in executory contract for the supply of services. As Richard (2003) says, the same is true of a beneficial contract or service, which is regard as being fully binding.
As regards the contract for necessaries, the leading authority is Nash v Iman (1908) which is related to a university student placed an order for 11 fancy waistcoats with a tailor. When the tailor supplied the goods for him, he refused to make payment. The tailor sued, but the student claimed that, as he was a minor, the contract could not be enforced against him. According to Richard (2003), the court of Appeal held that, "although clothing was clearly something which falls into the category of necessary goods, the trial judge had been justified in declaration that the waistcoats were not necessaries due to the student already adequately supplied with waistcoats, and there was no evidence that the waistcoats were appropriate to the lifestyle to the student." It can be supported by the same definition was used in the Sale of Good Act 1893.
The second major category of enforceable contracts is that of 'beneficial contracts of service' or employment contracts. According to Abbott al et (2002), "a contract of service or apprenticeship is binding on a minor if, looked at as a whole, in the light of the circumstances when it was made but all of these are for the minor's benefit and he also stressed that "the minor may be bound even if some of the clauses of the contract do not turn out to be his advantage". In the case of Clements v Land NW Railway (1894), a young porter agreed to join an insurance scheme to which his employers contributed, and to give up any claim for personal injury and he might have under the Employer's Liability Act 1880. Abbott at el (2002) said that "the minor was injured in such a way that would have entitled him to compensation under the Act, but the court of Appeal was held that the contract was binding on him since, looked at a whole, in the light of the circumstances when it was made, and the insurance scheme was more beneficial to him than the Act". On the contrary, a minor will not be bound if the contract is on the whole harsh or oppressive. In De Francesco v Barnum (1890), a girl was apprenticed for stage dancing by a contract which provided that she should be entirely at the disposal of her master that she would only be paid if he actually employed her. The term of their agreement is stated as during the apprenticeship, she could not marry and accept any professional engagement without the master consent and he could end the contract if he found her unsuitable. Finally, a very restrictive contract for apprentice dancers was held invalid.
As for the cases referred to as supporting the contention that the two transfers were void, the first was the case in Malaysia which engaged Tan Hee Juan v Teh Boon Keat (1934) which dealt with a transfer of land by an infant and which the court there held to be void. " It was held that the effect of section 10 and 11 of the Contract Act of India is that an infant cannot make a contract within the meaning of the Act, and that a contract made by an infant is not only voidable but void and the decision of the Privy Council is binding on this Court, and therefore there can no doubt whatever that those transfers are void."
In a nutshell, the contract of a person of unsound mind is not void but voidable at his option if the other party had notice of the insanity at the time of making the contract in English Law. It can also be summarized as the English law adopts a paternalistic approach to the question of minors' and seem to be protected and improve the position of the minor when dealing in business or trade context as the rules which applied consistently due to the minor's favour.