Capacity Flashcards
Chapple v Cooper [1844]
Facts A Minor asked undertakers to bury her husband. She then claimed she was not bound by the contract
Held: A funeral was a necessary
Nash v Inman [1908]
Facts: Inman ordered 11 waistcoats. He subsequently refused to pay
Held: The waistcoats were not necessaries. He had plenty of clothes already
Clements v London and North Western Railway Company [1894]
Facts: A minor agreed to give up his rights under the Employers Liability Act 1880 and instead entered the Company’s Insurance Scheme
Held: He was bound by the contract because on balance, the employer’s scheme was better than the statutory one
De Francesco v Barnum [1890]
Facts: A minor entered into an apprenticeship to learn dancing. There was no obligation for B to maintain or employ her. The apprenticeship could also be terminated without notice. DeF was offered work by others and accepted. B sued
Held: DeF was not bound by the contract because on balance, it was not to her benefit
Proform Sports Management Ltd v Proactive Sports Management Ltd [2006]
Facts A management company was sued for interference because Wayne Rooney was contracted not to play professional football until 17
Held: He was not bound by the contract. On balance, it was not to his benefit as a non-professional contract meant that he could not earn a living.
Edwards v Carter [1893]
Facts: Whilst a minor, Edwards agreed to transfer money he would inherit on his father’s death. He later tried to repudiate a marriage settlement on his father’s death
Held: Though those just over 18 can still repudiate a contract, four and a half years is too late.
Steinberg v Scala (Leeds) Ltd [1923]
Facts: Steinberg bought shares payable in two stages. She paid first but then wanted to repudiate
Held: She could repudiate without paying the second instalment. She could not recover the first because she was liable for this debt
Why does the law offer ways for minors to repudiate contracts?
It’s intended primarily to protect them from exploitation by adults; if a minor wishes to be held to a contract that they signed, there’s no issue.
Minors are deemed by law to not have sufficient capacity to contract; can you imagine how easy it would be to get a five-year-old to agree to a million dollar debt in exchange for a popsicle in the middle of summer?
Are drunk people or those with a mental illness bound by a contract?
No
An intoxicated person may lack the mental capacity necessary to contract.
If the intoxicated person enters into a contract, they must disaffirm the contract within a reasonable time of regaining capacity and learning of the contract
Capacity is looked at in relation to 4 main aspects, name them
- Contracts concerning minors
- Contracts made by companies/corporations
- Contracts made by those of ‘unsound mind’
- Contracts made by those intoxicated by drink or drugs
Sale of Goods Act 1979, s. 3(2)
(1) Capacity to buy and sell is regulated by the general law concerning the capacity to contract and to transfer and acquire property.
(2) 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 a reasonable price for them.
(3) In subsection (2) above “necessaries” means goods suitable to the condition in life of the minor or another person concerned and to his actual requirements at the time of the sale and delivery.
At what age is someone considered a minor?
18
What is capacity?
Capacity is the ‘ability’ (in the eyes of the law) to make valid, legally binding contracts which the law will recognise
If a person of unsound mind is being contracted, what will the courts look at?
- Was the person suffering from a recognised mental disability at the time of contract?
- Were they, as a result, incapable of understanding the nature of the act when making the contract
Contracts made when intoxicated are voidable (when person subsequently sober) AS LONG AS:
- The person did not know/understand what they were doing at the time made contract; and,
- The other party knows the person is intoxicated.
