Contractual capacity

Necessaries are goods or services:

1.     Suitable to the minor’s condition in life and

2.     Actually required by the minor at the time of sale

Nash v Inman

A tailor supplied expensive clothing to a Cambridge student. The tailor could not recover payment because the student already had sufficient clothing.

A minor may be bound by a contract that is

substantially for the minor’s benefit

Doyle v White City Stadium Ltd

A minor boxer entered into a boxing agreement. The contract was upheld because it was beneficial to the minor’s career and development.

A contract entered into by a person suffering from mental incapacity is not automatically invalid. The contract may be avoided where:

1.     The person lacked capacity to understand the transaction

2.     The other party knew, or ought to have known of the incapacity

Imperial Loan Co v Stone

A contract is only voidable where both mental incapacity and knowledge of that incapacity are established.

The law treats intoxication in a similar manner to mental incapacity. A contract may be avoided where:

1.     The person was so intoxicated that they could not understand the nature of the transaction

2.     The other party knew of the intoxication